Patriot National filed with the U.S. Bankruptcy Court a Second Amended Joint Chapter 11 Plan of Reorganization and Third Amended Disclosure Statement.
The Disclosure Statement notes, “Pursuant to the Plan, all of the issued and outstanding equity interests in PNI and each of its direct and indirect subsidiaries (the ‘Subsidiary Debtors’) will be extinguished, and the First Lien Lenders (or their designees) will receive 100% of newly issued equity interests in Reorganized PNI and each of the Reorganized Subsidiary Debtors on account of a portion of their claims arising under their applicable financing agreements.”
The Disclosure Statement includes Exhibit G: Committee Letter to Unsecured Creditors. Exhibit G argues, “The Committee believes that the Plan inappropriately provides for the conversion of a portion of Cerberus’ prepetition debt into equity in the reorganized Debtors at no real cost to Cerberus. In fact, many of the costs associated with the chapter 11 cases, including, among other things, payment of the certain of the indebtedness under the DIP Facility, Exit Facility and outstanding administrative claims will be borne by the Litigation Trust and thus, general unsecured creditors.”
Exhibit G continues, “In light of the flaws and defects with respect to the Plan and the information the Committee has received to date, the Committee believes that the current Plan is NOT in the best interests of the Debtors’ unsecured creditors.” The Court subsequently approved the Third Amended Disclosure Statement and scheduled an April 24, 2018 hearing to consider the Second Amended Joint Chapter 11 Plan.
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