Shapes/Arch emerges from bankruptcy, now owned by H.I.G. Capital affiliate

By Caroline Salls

Pittsburgh, Aug. 11 - Shapes/Arch Holdings, LLC and its businesses Aluminum Shapes LLC, Delair LLC, Ultra Hardware LLC and Accu-Weld LLC have emerged from Chapter 11 bankruptcy under the ownership of an affiliate of global private equity firm H.I.G. Capital, according to a company news release.

Wells Fargo Foothill has provided Shapes with a $65 million senior secured exit facility. The H.I.G. affiliate was Shapes' debtor-in-possession financing lender and the sponsor of the company's plan of reorganization.

"Today we debut as a more efficient and fully recapitalized company armed with a rekindled commitment to servicing our customers with world class products and services," Shapes chief executive officer Steven S. Grabell said in the release.

According to court documents, the exit facility will mature in three years and will bear interest at either Prime rate plus 50 basis points or Libor plus 275 bps.

Plan creditor treatment

Treatment of creditors under the company's plan will include:

• Holders of priority claims will recover 100% in cash;

• Holders of $1.11 million in secured real estate claims will recover 100% either in cash or through the return of the collateral securing the claim;

• Holders of Arch Acquisition DIP claims will be paid through the proceeds of the exit facility;

• Holders of CIT DIP loan claims will recover 100% in cash;

• Holders of $75,000 in miscellaneous secured claims will receive either the collateral securing their claims or the proceeds from the sale of the collateral;

• Membership interests in Shapes, Delair, Accu-Weld and Ultra will continue to be owned by Shapes/Arch;

• Holders of PMSI equipment lease agreement claims will continue to receive monthly amortized payments in accordance with a pre-bankruptcy agreement;

• Holders of $200,000 in shippers and warehouseman claims will either receive payment in full without interest on the effective date or payment in full in 24 equal monthly installments with 6% interest;

• Holders of collateralized insurance program claims will receive the cash deposit or letter of credit securing their claims, provided that the claimants return the collateral being held in excess of the secured claim amount;

• Holders of $300,000 in Environmental Protection Agency and $25,000 in New Jersey DEP claims will recover 100% in cash;

• Holders of general unsecured claims will receive a share of the sum of a class 10 pool escrow and distributions under a plan note, reserve balances and net recoveries on estate actions and avoidance actions; and

• Holders of Ben interests will receive no distribution under the plan.

Shapes/Arch, a Pennsauken, N.J.-based manufacturer and distributor of customized aluminum extrusions, aluminum fence systems and swimming pools, vinyl residential replacement windows and steel doors and hardware products, filed for bankruptcy on March 16 in the U.S. Bankruptcy Court for the District of New Jersey. Its Chapter 11 case number is 08-14631.

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