Cyxtera gets approval of disclosure statement; plan hearing Nov. 6

By Sarah Lizee

Olympia, Wash., Sept. 26 – Cyxtera’s disclosure statement for its Chapter 11 plan of reorganization was approved on Tuesday by the U.S. Bankruptcy Court for the District of New Jersey, according to an order.

The plan confirmation hearing is scheduled for Nov. 6.

As previously reported, the plan is based on a previously arranged restructuring support agreement with lenders of over two-thirds of the company’s outstanding first-lien debt.

Through the plan, the company can either pursue a balance sheet recapitalization or sell the business.

If a recapitalization takes place, the lenders have agreed to support a holistic restructuring of the company’s balance sheet, eliminating more than $950 million of Cyxtera’s pre-filing debt, and provide the company with enhanced financial flexibility to invest in its business.

Claim treatment

On the plan effective date, holders of DIP claims will receive either their pro rata share of the first-out take-back debt facility or payment in full in cash.

Administrative claims and priority tax claims will be paid in full.

Other priority claims and other secured claims are unimpaired by the plan.

Holders of allowed first-lien claims will receive their pro rata share of 100% of the new common stock, subject to dilution on account of the recapitalization management incentive plan (MIP), in the event of a recapitalization. Otherwise, they will receive their pro rata share of the net sale consideration.

Holders of general unsecured claims will receive their pro rata share of an $8.65 million recovery pool.

Section 510(b) claims will be canceled with no recovery.

Intercompany claims and intercompany interests will be reinstated or canceled with no distribution.

Existing equity interests will be canceled with no distribution.

Cyxtera is a data center firm based in Coral Gables, Fla. The company filed bankruptcy on May 4 under Chapter 11 case number 23-14853.

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