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

Momentive Performance Materials Plan Filed

Momentive Performance Materials (MPM) filed with the U.S. Bankruptcy Court a Joint Chapter 11 Plan and related Disclosure Statement. According to the Disclosure Statement, “The overall purpose of the Plan is to provide for the restructuring of the Debtors’ liabilities in a manner designed to maximize recovery to stakeholders and to enhance the financial viability of the Reorganized Debtors. Generally, the Plan provides for: payment in full in Cash to the Debtors’ general unsecured creditors (including trade creditors) and holders of claims arising from the Cash Flow Facility, First Lien Notes, and 1.5 Lien Notes (in each case, including accrued interest, but with regard to First Lien Notes and 1.5 Lien Notes, not including any premium or ‘make-whole’ amount); (b) conversion of the Second Lien Notes into the new equity of Reorganized MPM, pursuant to the terms of the Plan and as described herein, subject to dilution by a management incentive plan and the Rights Offering Stock; (c) provides for subscription rights to holders of Second Lien Notes in the $600 million Rights Offerings, giving such holders the opportunity to purchase a percentage of the new Rights Offering Stock at a price per share determined by using the pro forma capital structure and an enterprise value of $2.2 billion and applying a 15% discount to the equity value thereto; (d) provides for a recovery to holders of the Holdings PIK Note in the amount of the Cash available at Holdings as of the effective date of the Plan, after taking into account administrative expenses; and (e) provides for no recovery to the holders of Senior Subordinated Notes on account of the subordination provisions set forth in the Senior Subordinated Indenture. Pursuant to the Backstop Commitment Agreement, the Backstop Parties have agreed to backstop the Rights Offerings in exchange for a fee, payable in Rights Offering Stock (or, if the Backstop Commitment Agreement is terminated under certain circumstances, in Cash), of an additional 5% of the Rights Offering Amount. The Court scheduled a June 19, 2014 hearing on the Disclosure Statement.

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