Armstrong Energy on Jan. 9 entered into an amended restructuring support agreement with the unsecured creditors’ committee in its case under which the company boosted the recovery for holders of general unsecured claims, and the panel agreed to support the company’s reorganization plan, court filings show.
The company filed an amended reorganization plan on Jan. 9, reflecting the increased recovery.
The company’s reorganization plan confirmation hearing remains scheduled for Feb. 2, according to the court filings. The St. Louis bankruptcy court approved the adequacy of the company’s disclosure statement on Dec. 18, 2017.
Under the amended plan, the company would establish a GUC reserve of $2.2 million, with the company providing $1.225 million, Thoroughbred Resources (the company’s primary mineral rights provider, and a subsidiary of the company’s equity sponsor) contributing $0.55 million, and Knight Hawk Holding (which will manage the company’s operations upon completion of the restructuring transaction) contributing $0.425 million.
The company’s initial disclosure statement said that unsecured claims would be allowed in the amount of $124–127.8 million, including a senior note deficiency claim (which would not receive any distribution from the GUC reserve) of $99.1–102.8 million, translating into allowed GUCs that would receive a distribution from the reserve of $21.2–28.7 million, or a recovery of 7.7–10.4%.
Under the company’s initial plan, the recovery for GUCs, which consisted of a distribution of unencumbered collateral, would have been minimal, at 0–1%.
As reported, under the company’s proposed reorganization plan, the company’s noteholders would receive all of the equity in a reorganized company in exchange for the satisfaction of $90 million of their claims, subject to higher and better offers that the company agreed to seek during a 45-day post-petition marketing period.
The company said late last year that it was continuing to evaluate two indications of interest that it received during the marketing period, notwithstanding its expiration, “to determine which proposal, including the one memorialized in the transaction agreement [with noteholders], represents the highest and best offer.” — Alan Zimmerman
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