C & K Market second amended plan of reorganization confirmed by court

By Caroline Salls

Pittsburgh, June 30 – C & K Market, Inc.’s second amended plan of reorganization was confirmed Monday by the U.S. Bankruptcy Court for the District of Oregon.

As previously reported, the plan gives the company the option to complete a rights offering with or without a backstop party.

Upon filing the amended plan, C & K said the subscription price for a rights offering amount of up to $10 million would be $8 per share, up from $7.50 under the original plan. The subscription price is based on a $48 million net equity value of the reorganized company, up from $45 million.

If the entire rights amount is subscribed for, 1.33 million shares of common stock and 1.24 million shares of series A preferred stock would be issued under the rights offering.

Under the plan,

• Administrative expense claims, priority tax claims, other priority claims and the secured claims of U.S. Bank NA will be paid in full on the plan effective date;

• All other secured claims will be paid in full over time with interest.

In general, C & K said secured creditors with personal property collateral will be paid in 48 equal payments, with interest at 6%, compared with 60 payments with interest at 5% under the original plan, and secured creditors with real property collateral will be paid in 84 equal payments with interest at 6%, up from 5%, based on a 25-year amortization with a balloon payment in seven years;

• Holders of small unsecured claims of $10,000 or less will recover 80% of their claims within 90 days of the effective date;

• Holders of general unsecured claims will receive one share of common stock and one share of series A preferred stock of the reorganized company in exchange for each $10 of claims and will receive a subscription right if the company elects to complete a rights offering; and

• All existing equity securities and employee equity security plans will be cancelled as of the effective date.

C & K, a Brookings, Ore.-based supermarket company, filed for bankruptcy on Nov. 19. The Chapter 11 case number is 13-64561.

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