Bankruptcy News

We've summarized the latest docket activity and news for publicly traded companies currently operating under U.S. Bankruptcy Court protection.

Bankruptcy/Chapter 11 / Bonds

Overseas Shipholding Group Plan Filed

Overseas Shipholding Group filed with the U.S. Bankruptcy Court a Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, “The Debtors believe that the creditors of the Debtors will receive more value through the continuation of the Reorganized Debtors as a going concern than they would receive upon liquidation of the Debtors. The key components of the Plan include: Payment in full of all Allowed Administrative Claims, Priority Tax Claims, Other Priority Claims, Secured Vessel DIP Claims, Secured Vessel Claims, Other Secured Claims, and Other Unsecured Claims on the Effective Date of the Plan; The retention of the CEXIM Vessels and the DSF Vessels and payment in full of the CEXIM Claims and the DSF Claims; The satisfaction of Credit Agreement Claims in full through the distribution of Reorganized OSG Stock and Reorganized OSG Jones Act Warrants and the right to participate in the Rights Offering; The payment of the 8.75% Notes Claims in full in Cash, including any applicable contractual interest, the Reinstatement of the 8.125% Notes, including payment of any applicable contractual or default interest, and the Reinstatement of the 7.500% Notes, including payment of any applicable contractual interest; The Reorganized Debtors’ entry into the Exit Financing on the Effective Date, consisting of a $735 million senior-secured term loan facility and a $200 million revolving credit facility that, together, will provide the Reorganized Debtors with the funding necessary to both satisfy the Plan’s cash payment obligations and the expenses associated with closing the Exit Financing facilities, and to finance the Reorganized Debtors’ ongoing operations and capital needs following the emergence from Chapter 11....A Rights Offering in an amount of $300 million supported by a Subscription Commitment by certain Holders of Credit Agreement Claims; Holders of Subordinated Claims and of Old Equity Interests in OSG jointly will receive a combination of Reorganized OSG Stock and Reorganized OSG Jones Act Warrants with a value equal to $61.4 million.” The Disclosure Statement continues, “To ensure that at least 75% of the equity interests in Reorganized OSG will be owned by U.S. Citizens in compliance with the Jones Act, at least 77% of the shares of Reorganized OSG Stock issued on the Effective Date will be issued to Domestic Holders. The remaining 23% of Reorganized OSG Stock will be issued on a Pro Rata basis on the Effective Date among the Foreign Holders, such that no more than 23% of the Reorganized OSG Stock is owned by Foreign Holders. The bylaws and certificate of incorporation of Reorganized OSG will also restrict foreign ownership and control of Reorganized OSG to not more than 23% and will contain certain other provisions to comply with the Jones Act....The Debtors have reached agreement on the principal terms of the Plan with Holders of Credit Agreement Claims representing approximately 72% of the Credit Agreement Claims. Those Holders of Credit Agreement Claims have executed a Plan Support Agreement, under which they have agreed, among other things, to vote their claims to accept the Plan, subject to certain terms and conditions, including without limitation Bankruptcy Court approval of the Disclosure Statement. Holders of Credit Agreement Claims who are parties to the Plan Support Agreement have also executed the Equity Commitment Agreement, agreeing to subscribe to a Rights Offering with an aggregate offering amount of $300 million dollars of Reorganized OSG Stock and Reorganized OSG Jones Act Warrants.”

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