Real Industry Exclusivity Termination Sought


Real Industry’s ad hoc committee of equity security holders filed with the U.S. Bankruptcy Court a motion for an order terminating the Debtor’s exclusivity in order to allow the ad hoc committee to file a competing plan and, additionally, adjourning the Disclosure Statement hearing that is currently scheduled for March 29, 2018.

The motion explains, “The Ad Hoc Committee moves to terminate the exclusive periods on several grounds. First, the Debtor has ceded its exclusive right to file a plan and solicit acceptances by filing a Plan that transfers material value to outside investors at the expense of the existing shareholders in derogation of its duty to shareholders. Second, the Debtor has steadfastly refused to negotiate with shareholders in any official capacity with respect to the Plan, but nevertheless failed to garner the requisite support for the Plan–the one-off negotiations with individual shareholders notwithstanding. The Plan purportedly has the support of a few shareholders. The Proponents have yet to file any documents that evidence this support. Third, the Plan contains a number of provisions, that may render it un-confirmable. Finally, the Ad Hoc Committee has an alternative plan…that would preserve Real Industry’s equity value and the NOLs for the benefit of the existing shareholders by raising capital through a rights offering.”

In addition, “Termination of the Debtor’s exclusivity period will level the playing field and shareholders to pursue a financially superior and less dilutive option….Adequate review time is essential at this point because the Disclosure Statement describes an important agreement with Aleris, the holder of its Preferred Shares, which the Debtor did not disclose until a few days earlier at a public hearing on the Ad Hoc Committee’s motion for appointment of an official committee of equity holders. The testimony at the hearing and the Debtor’s unwavering position in discussions has been that the Aleris Preferred interest was not subject to compromise, reinstatement or reduction.”

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