Optima Specialty Steel filed with the U.S. Bankruptcy Court a Revised Disclosure Statement relating to the Company’s Third Amended and Modified Joint Chapter 11 Plan of Reorganization.
According to the Disclosure Statement, “The Plan provides for a comprehensive reorganization of the Debtors that will recapitalize the Debtors’ balance sheet and ensure that the Debtors emerge from bankruptcy with a robust capital structure. The Plan will leave creditors (other than Holders of a Class 3-A Claim) unimpaired, paying fixed, undisputed and liquidated claims in full in cash and reinstating contingent, disputed or unliquidated claims. The Debtors believe that the Plan will enable them to emerge quickly from chapter 11 as a financially stronger enterprise that can thrive in the marketplace and maintain their ongoing business relationships with all of their constituencies, including vendors, suppliers, employees, and pensioners. Specifically, to achieve the balance sheet restructuring provided for in the Plan, the Debtors will convert the Unsecured Notes Claims – over $87.55 million of unsecured debt – held by certain investment funds and accounts managed by DDJ Capital Management, to 100% of the New Common Stock in the Reorganized Optima, subject to dilution by the Management Incentive Plan.”
In addition, “Under the Plan, the Reorganized Debtors will also enter into the Exit Term Loan Facility and, if necessary, an Exit Revolver Facility, the proceeds of which shall be used to fund the Debtors’ and Reorganized Debtors’ obligations under the Plan, provide liquidity and working capital to the Reorganized Debtors, and for general corporate purposes. The debt-for-equity conversion and the loans under the Exit Facilities will fund the implementation of the Plan and leave all creditors (other than the Unsecured Noteholders) unimpaired….The Unsecured Notes Claims shall be allowed in the full amount of all outstanding obligations due under the Unsecured Notes Indenture, including, but not limited to, accrued but unpaid interest as of the Petition Date, which principal and accrued unpaid interest totaled $87,550,000 as of the Petition Date.”
The Court subsequently approved the Disclosure Statement and scheduled an October 16, 2017 hearing to consider the Plan, with objections due by October 6, 2017.
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