Ampal-American committee files draft plan, optimistic about agreement

By Caroline Salls

Pittsburgh, Dec. 17 - Ampal-American Israel Corp.'s official committee of unsecured creditors filed a draft version of a plan of reorganization and related disclosure statement Monday with the U.S. Bankruptcy Court for the Southern District of New York.

The committee said it and the company had not been able to finalize and file a consensual joint plan by Dec. 16 after the creditor group raised issues that had not been previously discussed with Ampal-American.

However, the committee said it was optimistic that the parties would agree to the terms of a consensual plan before a hearing scheduled for Dec. 20.

The committee said the draft versions of the plan and disclosure statement it filed with the court have not yet been approved by the committee, are subject to revision and contain terms and provisions that the creditor group has yet to address with Ampal-American and creditor constituents.

In addition, Ampal-American filed an amended version of its plan and disclosure statement on Monday. The company said the amended plan mirrors the terms negotiated with the committee before the creditor group drafted its own plan.

Committee plan terms

According to the disclosure statement draft, terms of the committee's plan would include the following:

• Holders of general unsecured claims would receive a share of either 100% of the preferred stock of the reorganized company or a cash payment if an equity buyout option is exercised, after payment in cash out of funds held in series B and series C deposit accounts;

• The funds held in the series B and series C deposit accounts would be distributed to the holders of series B and series C debentures;

• The committee's plan does not provide for any distribution to holders of intercompany claims, but the reorganized company would have the right to adjust, reinstate, cancel or extinguish those claims;

• Holders of equity interests would retain their shares of class A stock in the reorganized company and would have the right to exercise an equity buyout option by making a cash investment in Ampal-American in an amount equal to the greater of 75% of the net allowed general unsecured claims amount as of the plan effective date or an undisclosed dollar amount, in which case the holders of general unsecured claims would receive a share of the cash payment instead of receiving preferred stock;

• The plan would provide for cash distributions to holders of allowed administrative expense claims, priority tax claims and priority claims;

• On the plan effective date, all property of Ampal-American's estate, including any and all causes of action, would vest in the reorganized company; and

• Confirmation of the committee's plan would be conditioned on the execution of an exit facility.

Company plan comparison

Treatment of creditors under the company's amended plan would include the following:

• Administrative claims, priority tax claims and priority claims would be paid in full in cash;

• Holders of general unsecured claims would receive a share of 100% of preferred stock of the reorganized company or a cash payment if an equity buyout option is exercised, provided, however, that the funds held in a series B deposit account would be distributed to holders of the series B debenture claims and funds held in a series C deposit account would go to series C debenture holders;

• Holders of intercompany claims would not receive any monetary distribution, provided that the reorganized company would have the right to adjust, reinstate, cancel, extinguish or pay those claims; and

• Holders of equity interests would retain their shares of class A stock in the reorganized company, provided that they would have a right to exercise an equity buyout option.

All equity interests that are either unexercised or unvested as of the plan effective date would be cancelled and terminated.

Ampal-American Israel, a Tel Aviv-based holding company, filed for bankruptcy on Aug. 29. The Chapter 11 case number is 12-13689.

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