Gibson Brands filed with the U.S. Bankruptcy Court a Joint Chapter 11 Plan of Reorganization and a related Disclosure Statement. According to the Disclosure Statement, “In connection with developing the Plan, the Company reviewed its current business operations and compared its prospects as an ongoing business enterprise with the estimated recoveries in various liquidation scenarios. As a result, the Company concluded that the Company’s enterprise value would be maximized by continuing to operate as a going concern. The Company believes that its ongoing business and assets have significant value that would not be realized in a liquidation, either in whole or in substantial part….The Debtors have outstanding secured debt in the principal amount of over $518 million, consisting of $375 million of principal amount of Prepetition Secured Notes (plus accrued and unpaid prepetition interest of $8,227,865) and, following the satisfaction of the Prepetition ABL/Term Loan Secured Claims through exercise of the Purchase Option or the ABL Refinancing, will have $135 million to $139 million of principal amount of outstanding DIP Financing (depending on whether the ABL Refinancing Increment is borrowed under the DIP Facility)….The New Exit Term Loan Facility, however, may be less than the $135 million to $139 million that may be outstanding under the DIP Facility as of the Effective Date…. Under the Management Employment and Consulting Agreement, the Supporting Principals will receive (i) in the case of Mr. Berryman, a salary and bonus totalling $3.35 million and New Warrants exercisable for up to 2.25% of the Equity Interests in Reorganized Gibson plus ongoing health benefits, and (ii) in the case of Mr. Juszciewicz, (a) $2.1 million in consulting fees payable in quarterly instalments and New Warrants exercisable for up to 2.25% of the Equity Interests in Reorganized Gibson plus ongoing health benefits and (b) in consideration for future assistance in monetizing the Reorganized Debtors’ interest in TEAC, a profits interest in the TEAC Shares owned by Gibson Holdings.” The Court scheduled a July 25, 2018 hearing to consider the Plan with objections due by July 18, 2018.
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