Avaya’s Second Amended Joint Chapter 11 Plan of Reorganization [became effective, and the Company emerged from Chapter 11 protection. The U.S. Bankruptcy Court confirmed the Plan on November 28, 2017.
BankruptcyData’s detailed Plan Summary notes, “The Revised Second Amended Plan is premised on a global settlement between the Mediation Parties, as further set forth in the First Lien Plan Support Agreement and Crossover Plan Support Agreement, which modifies the First Amended Plan as follows: the First Lien Reorganized HoldCo Equity Distribution will now equal 90.5% of the Reorganized HoldCo Common Stock less the General Unsecured Recovery Equity Reserve (subject to dilution by the Management Equity Incentive Plan and Warrants); the Second Lien Notes Settlement Equity Distribution will now equal 4.0% of the Reorganized HoldCo Common Stock (subject to dilution by the Warrants and the Management Equity Incentive Plan) and each Holder of a Second Lien Notes Claim will also receive its pro rata share of Warrants for an additional 5.132% of Reorganized HoldCo Common Stock; the Second Lien Call Right is eliminated; PBGC will now receive on account of the PBGC Claims 5.5% of the Reorganized HoldCo Common Stock (subject to dilution for the Warrants and for any Reorganized HoldCo Common Stock issued pursuant to the Management Equity Incentive Plan) and the PBGC Cash Consideration will now equal $340.0 million; and the General Unsecured Recovery Cash Pool will be reduced from $60.0 million to $57.5 million, and the Reorganized Debtors will pay the GUC Oversight Administrator Costs incurred after the Effective Date through the first (1st) anniversary of the Effective Date in an amount not to exceed $500,000 in the aggregate.”
Avaya’s president and C.E.O., Jim Chirico, states, “In less than a year since the commencement of our chapter 11 restructuring, Avaya has emerged as a publicly traded company with a significantly strengthened balance sheet. Overall, we reduced our prior debt load by approximately $3 billion, and we exit today with more than $300 million in cash on our balance sheet. The reduction of our debt and certain other long-term obligations will also improve annual cash flow by approximately $300 million compared to fiscal 2016. We have the flexibility we need to invest in the large and growing contact center and unified communications markets as we complete our transformation to a software, services and cloud solutions provider. With a new Board and leadership team firmly in place, Avaya is now well-positioned to execute on its growth plan and deliver the returns and value expected by our stakeholders.”
This telecommunications services’ provider filed for Chapter 11 protection on January 19, 2017, listing $6.9 billion in pre-petition assets.
Read Avaya’s Bankruptcy Plan Summary.
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