Trident Holding Company – Files Plan and Disclosure Statement, Tries to Tempt First Lien Holders With 4% Warrant Recovery

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March 25, 2019 – The Debtors filed (i) a Joint Plan and a related Disclosure Statement [Docket Nos. 252 and 253] and (ii) a motion requesting approval of the Disclosure Statement; and Plan solicitation and voting procedures [Docket No. 254].

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 General Unsecured Claims would share a General Unsecured Claims Cash Pool of $100,000.”

The following is a 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. 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”).
  • Classes 2B – 2C (“First Lien Claims”) is impaired and entitled to vote on the Plan. 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 each of classes 2B and 2C accept, but classes 3B and Class 3C do not, each holder shall receive its pro rata share and interest in 5% of the Warrants. If any of classes 2B or 2C do not accept, holders shall not receive any distribution.
  • Classes 3B – 3C (“Second Lien Claims”) is impaired and entitled to vote on the Plan. If holders of each of classes 2B, 2C, 3B, and 3C accept, each holder shall receive its pro rata share and interest in 1% of the Warrants. If any of classes 2B, 2C, 3B or 3C do not accept, holders shall not receive any distribution.
  • 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 6A – 6C (“General Unsecured Claims”) is impaired and entitled to vote on the Plan. Estimated Recovery is less that 1%. If Class 6C accepts, holders shall receive its pro rata share and interest in the General Unsecured Claims Cash Pool. If Class 6C does not accept, holders shall not receive any distribution.
  • Classes 7A – 7B (“PIK Note 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: Joint Plan of Reorganization of Trident Holding Company, LLC and Its Debtor Affiliates
  • Exhibit B: Financial Projections (to be filed)
  • Exhibit C: Hypothetical Liquidation Analysis (to be filed)

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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