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

LRI Holdings Plan Confirmed

The U.S. Bankruptcy Court issued an order confirming LRI Holdings' First Amended Joint Plan of Reorganization. As previously reported, "On September 20, 2016, the Debtors, Creditors' Committee and the parties to the Restructuring Support Agreement agreed to the Creditors' Committee Settlement to resolve in principle the objections that the Creditors' Committee raised regarding the DIP Facilities, the Restructuring Support Agreement, and the Plan and Disclosure Statement. That resolution is now reflected in the Final DIP Order and Plan. Pursuant to the Creditors' Committee Settlement, the treatment of holders of General Unsecured Claims is improved by (i) an increase in the amount of cash in the General Unsecured Claims Pool from $350,000 to a total of $1 million, (ii) a waiver of deficiency claims on account of the Notes and all other unsecured claims held by the Unanimous Supporting Noteholders, (iii) the waiver and release of all Avoidance Actions by the Debtors and Reorganized Debtors, and (iv) the appointment of an Ombudsman with consultation rights regarding the allowance of general unsecured claims, subject to certain thresholds. The Creditors' Committee Settlement will also provide an estimated $5 million of increased liquidity for the benefit of the Reorganized Debtors through a combination of adding an additional $3.5 million of 'new money' loans under the Exit Second Lien Facility and an estimated $1.5 million reduction in the Cash-Out Payment as a result of lowering the threshold to determine which holders of Unexchanged Notes Claims will receive a Cash-Out Payment….[A]s a result of the benefits of the global settlement to General Unsecured Creditors--in the form of increased recoveries and strengthening the Reorganized Debtors' financial position at emergence--the Creditors' Committee agreed to support confirmation of the Plan, including the settlements and releases embodied in the Plan." This restaurant chain operator filed for Chapter 11 protection on August 8, 2016, listing $390 million in pre-petition assets.

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