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Gibson Brands Amended Plan and Disclosure Statement Filed

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Gibson Brands filed with the U.S. Bankruptcy Court an Amended Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, “The Plan provides that upon emergence from these Chapter 11 Cases, the Debtors will satisfy the $135 million to $139 million of DIP Facility Claims that may be outstanding under the DIP Facility as of the Effective Date through a conversion to equity or ‘takeback paper’. Specifically, pursuant to the Restructuring Support Agreement, the Required Lenders shall elect, in their sole discretion after consulting with the Debtors, to either (i) convert all of the remaining DIP Facility Claims to New Common Stock at a price per share equal to 80% of Plan Value, (ii) refinance all of the remaining DIP Facility Claims with ‘takeback paper’ in the form of a New Take-Out Facility secured by liens junior to the New Exit ABL Facility, or (iii) satisfy the remaining DIP Facility Claims through a combination of (i) and (ii)…. Jefferies has concluded that the Enterprise Value of the Reorganized Debtors, as of an assumed effective date of September 30, 2018 (the ‘Assumed Effective Date’), will range from approximately $360 million to approximately $430 million, with a midpoint of approximately $395 million. The Debtors separately assumed the value of the Debtors’ 54.4% equity interest in TEAC to be approximately $61 million based on the volume-weighted average price (“VWAP”) over the prior 90 trading days ended July 6, 2018. The range of Enterprise Values together with the assumed value of the equity interest in TEAC represents the distributable value of the Reorganized Debtors. This valuation assumes the Debtors emerge with an undrawn revolving credit facility and therefore distributable equity value (the ‘Distributable Equity Value’) is assumed to range from approximately $421 million to approximately $491 million, with a midpoint of approximately $456 million.”

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