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

Eagle Bulk Shipping Chapter 11 Petition, Plan Filed

Eagle Bulk Shipping filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of New York, case number 14-12303. The Company, which is engaged in the ocean transportation of various bulk cargoes worldwide, is represented by Paul M. Aronzon of Milbank, Tweed, Hadley & McCloy. The Company announced that it has entered into a restructuring support agreement with lenders holding more than 85% of the loans outstanding under its fourth amended and restated credit agreement, dated June 20, 2012, regarding the terms of a balance sheet restructuring that will strengthen Eagle Bulk Shipping's financial position, reduce its debt obligations by approximately $975 million and significantly enhance liquidity. Concurrent with its Chapter 11 petition, the Company also filed with the Court a Prepackaged Plan of Reorganization and related Disclosure Statement. The prepackaged case, which excludes all of the Company's operating and management subsidiaries, is intended to facilitate a prompt exit from the financial restructuring process without disruption to Eagle Bulk Shipping's business. The Disclosure Statement explains, "[T]he Plan substantially deleverages the Debtor's balance sheet by converting over 80% of its approximately $1.2 billion of debt into equity in the Reorganized Debtor and repaying the balance of such debt in cash from the proceeds of the Exit Financing Facility. As part of the overall settlement embodied in the Restructuring Support Agreement and the Plan, the Prepetition Credit Facility Lenders are voluntarily forgoing their right to part of the distributions under the Plan that they are otherwise entitled to receive so that the Debtor can provide new common stock and warrants to holders of Equity Interests in exchange for the surrender or cancellation of their Equity Interests." The Company has also obtained a commitment for up to $50 million of debtor-in-possession financing from certain of its lenders which, subject to Court approval, will significantly enhance liquidity.

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