Trident Holding Company – Files Amended Plan and Disclosure Statement, First and Second Lien Holders Set to Lose Almost $400mn

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April 29, 2019 – The Debtors filed an Amended Plan and a related Disclosure Statement [Docket Nos. 246 and 347]; each of which included redlines showing changes from versions of those documents filed on March 25, 2019 [Docket Nos. 252 and 253].

The Disclosure Statement notes, “The Plan contemplates a restructuring pursuant to which (a) Allowed DIP Facility Claims would convert into obligations under the Exit Term Loan Facility; (b) Allowed Priority First Lien Claims would receive (i) $105 million in obligations under the New First Lien Facility and (ii) 100% of the New Pioneer Units, subject to dilution on account of the Warrants and the MIP (each, as defined below); (c) Holders of First Lien Claims and Second Lien Claims would receive certain Warrants exercisable for up to 5% of the New Pioneer Units (depending on Class acceptance); and (d) Holders of Operating Company General Unsecured Claims would share a General Unsecured Claims Cash Pool of $100,000.”

The following is the updated summary of classes, claims, voting rights and expected recoveries (defined terms are as defined in the Plan and/or Disclosure Statement):

  • Class 1B – 1C (“Priority First Lien Claims”) is impaired and entitled to vote on the Plan. There was approximately $2579.2mn of priority first lien claims outstanding as at the Petition date. Each holder shall receive its pro rata share and interest in (i) the New First Lien Facility, and (ii) 100% of the New Pioneer Units to be issued by Reorganized Pioneer, subject to dilution on account of the warrants and the Management Incentive Plan (the “MIP”). Estimated recovery is 44% to 63%.
  • Classes 2B – 2C (“First Lien Claims”) is impaired and entitled to vote on the Plan. There was approximately $219.82mn of first lien claims outstanding as at the Petition date. If holders of each of classes 2B, 2C, 3B, and 3C accept, each holder shall receive its pro rata share and interest in 4% of the Warrants.  If the First Lien Classes and the Second Lien Classes are Accepting Classes, each Holder of an Allowed First Lien Claim shall receive its Pro Rata share and interest in 4% of the Warrants. If the First Lien Classes are Accepting Classes, but Second Lien Classes are not Accepting Classes, each Holder of an Allowed First Lien Claim shall receive its Pro Rata share and interest in 5% of the Warrants. If the First Lien Classes are not Accepting Classes, Holders of Allowed First Lien Claims shall not receive any distributions on account of such Allowed First Lien Claims. Estimated recovery is 0% to less than 1%.
  • Classes 3B – 3C (“Second Lien Claims”) is impaired and entitled to vote on the Plan. There was approximately $175.2mn of second lien claims outstanding as at the Petition date. If the First Lien Classes and the Second Lien Classes are Accepting Classes, each Holder of an Allowed Second Lien Claim shall receive its Pro Rata share and interest in 1% of the Warrants. If the First Lien Classes or the Second Lien Classes are not Accepting Classes, Holders of Allowed Second Lien Claims shall not receive any distributions on account of such Allowed Second Lien Claims. Estimated recovery is 0% to less than 1%.
  • Classes 4A – 4C (“Other Secured Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. Estimated Recovery is 100%.
  • Classes 5A – 5C (“Other Priority Claims”) is unimpaired and deemed to accept and not entitled to vote on the Plan. Estimated Recovery is 100%.
  • Classes 6C (“Operating Company General Unsecured Claims”) is impaired and entitled to vote on the Plan. If the Operating Company General Unsecured Class is an Accepting Class, holders shall receive its Pro Rata share and interest in the General Unsecured Claims Cash Pool. If it is an Accepting Class, holders shall not receive any distributions. Estimated recovery is 0% to less than 1%.
  • Classes 7A – 7B (“Holding Company General Unsecured Claims”) is impaired, deemed to reject and not entitled to vote on the Plan. Estimated Recovery is 0%.
  • Classes 8A – 8C (“Intercompany Claims”) is impaired or unimpaired, deemed to reject or accept, and not entitled to vote on the Plan. Estimated Recovery is 100% or 0%.
  • Classes 9A – 9C (“Other Subordinated Claims”) is impaired, deemed to reject and not entitled to vote on the Plan. Estimated Recovery is 0%.
  • Classes 10A – 10C (“Interests in Debtor Subsidiaries”) is impaired or unimpaired, deemed to reject or accept, and not entitled to vote on the Plan. Estimated Recovery is 100% or 0%.
  • Class 11A (“Interests in Pioneer”) is impaired, deemed to reject and not entitled to vote on the Plan. Estimated Recovery is 0%.

Exhibits attached to the Disclosure Statement:

  • Exhibit A: Amended Joint Plan of Reorganization of Trident Holding Company, LLC and Its Debtor Affiliates
  • Exhibit B: Financial Projections
  • Exhibit C: Hypothetical Liquidation Analysis
  • Exhibit D: Valuation Analysis

Key Dates:

  • Deadline for Objections to Disclosure Statement: April 24, 2019
  • Disclosure Statement Hearing Date: May 1, 2019
  • Voting Deadline: June 6, 2019
  • Plan Objection Deadline: June 6, 2019
  • Confirmation Hearing: June 13, 2019

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