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As previously reported [Docket No. 548] “The Plan provides for the substantial reduction of the Debtors’ funded debt by approximately $455 million and a net reduction of the Debtors’ annual debt service obligations by approximately $36 million….In addition…the Debtors anticipate that upon emergence from chapter 11, their obligations under the DIP ABL Documents and the DIP Term Loan Documents will be converted into exit facilities and the DIP Term Loan Lenders will provide an additional $35 million of new money at exit to support the Debtors’ post-emergence operations. As a result, the Debtors will have almost $100 million in liquidity upon emergence from chapter 11.
- The Plan contemplates the distribution of New Second Lien Notes and New Equity Interests to the holders of Senior Secured Notes Claims in exchange for the cancellation of their Senior Secured Notes Claims. More specifically, the Plan provides for the following treatment of Claims and Interests:
- Each holder of a Senior Secured Notes Claim will receive a Pro Rata share of (a) the New Second Lien Notes in the aggregate principal amount of $100 million and (b) 100% of the New Equity Interests subject to dilution under the post-emergence equity-based management incentive plan (the ‘Management Incentive Plan’).
- The DIP ABL Claims will, with the consent of the holders of such Claims, be converted to and deemed to be issued under an amended and restated asset-based lending credit agreement (the ‘Exit ABL Credit Agreement’), the DIP Term Loan Claims will be converted and deemed to be issued under an amended and restated term loan agreement (the ‘Exit Term Loan Credit Agreement’), and the DIP Term Loan Lenders will fund an additional $35 million at exit to support the Debtors’ operations.
- All Priority Non-Tax Claims, Other Secured Claims, Intercompany Claims, and Intercompany Interests are unimpaired by the Plan.
- The GUC Litigation Trust Causes of Action and the GUC Litigation Trust Payment…will be contributed to a liquidating trust (the ‘GUC Litigation Trust’) for the exclusive benefit of Allowed General Unsecured Claims and the proceeds thereof will be available for all holders of Allowed General Unsecured Claims to share on a pro rata basis.
- All holders of Interests in Holdings II (the ‘Existing Holdings II Interests’) and all holders of Interests in Tops MBO Corporation (‘Tops MBO,’ and the Interests in Tops MBO, the ‘Existing MBO Interests’) will receive no distribution or consideration under the Plan on account of their equity interests, and all such Interests will be cancelled.
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