Bush Industries files for prepackaged Chapter 11

By Jeff Pines

Washington, March 30 - Bush Industries, Inc. filed for Chapter 11 on March 31, according to filings with the U.S. Bankruptcy Court for the Western District of New York.

The filing was expected after the company announced Tuesday it had reached a lock-up agreement with holders of 85% of its bank debt.

Under the proposed plan of reorganization, the company's approximately $160 million of senior debt will be restructured with about $70 million refinanced by an exit financing facility through 2006 and the rest converted into 100% of the equity of the reorganized company.

Jamestown, N.Y.-based Bush lists its largest unsecured creditor as JPMorgan Chase Bank itself and as agent for the $163 million outstanding on the company's credit facility. The value of the collateral is uncertain, according to the filing. The next largest creditor is Bekins Worldwide Solutions with a trade debt of $553,346.

The company is seeking a $15 million debtor-in-possession financing facility with JPMorgan Chase Bank acting for itself and as an agent for Bear Stearns Investment Products, Inc.; B IV Capital Partners, LP; GMAM Investment Funds Trust II; New Star Factors, Inc.; and Sea Pines Funding LLC.

The facility will mature on the earliest of Sept. 30, the effective date of a plan, 30-days after the interim order if there is no final order, the date of sale of substantially all of Bush's assets or the effective date of a plan of confirmation or as an exercise of remedies based upon a default.

The interest rate will be prime plus 200 basis points for the first $10 million. Anything amount borrowed over that will bear interest at prime plus 300 basis points. The unused commitment fee will be 50 basis points and the facility fee will be $450,000.

Bush wants access to $10 million with the interim order and the remaining $5 million when it gets the final order.

In addition, the company is seeking the use of cash collateral. It said it has the support of the holders of 87.28% of its pre-Chapter 11 loans. HSBC has not agreed to let the company use cash collateral.

Bush's Chapter 11 case number is 04-12295.

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