Clover Technologies pre-packaged plan deemed effective as of Feb. 3

By Caroline Salls

Pittsburgh, Feb. 4 – 4L Holdings, which operates as Clover Technologies Group, LLC, filed a notice Tuesday with the U.S. Bankruptcy Court for the District of Delaware that its pre-packaged plan of reorganization took effect on Monday.

The plan was confirmed on Jan. 22.

As previously reported, 4L said the plan will give it a significantly stronger balance sheet and increased financial flexibility.

With the recent acquisition of Teleplan, the company said it will now possess the financial strength and operational capabilities to offer cost-effective, innovative supply chain solutions for customers worldwide, reaching more than 120 countries across Europe, the Americas and Asia Pacific.

On Dec. 11, 4L announced that it and some of its affiliates entered into a restructuring support agreement with the majority of its equityholders and a group of lenders representing more than 67% of its outstanding long-term debt that will equitize all of the company’s $644 million in long-term debt.

In addition to the restructuring, the company said the agreement supports two recently announced strategic transactions, including Clover Wireless’ acquisition of Teleplan, which closed on Dec. 4, and the sale of Clover Imaging to Norwest Equity Partners.

The proceeds from the sale of Clover Imaging will be used to pay down a portion of 4L’s outstanding long-term debt.

Under Clover’s pre-packaged plan, holders of term loan secured claims will receive a share of 100% of the new common stock in the reorganized company, subject to dilution from a management incentive plan and new warrants, as well as take-back term loans and 100% of excess cash.

Existing equityholders will receive a share of new warrants.

Unless paid in full in advance, general unsecured claims will be reinstated.

Administrative claims, priority tax claims and other secured claims will be paid in full in cash.

Clover is a Hoffman Estates, Ill.-based collector and recycler of imaging supplies. The company filed bankruptcy on Dec. 16 in the U.S. Bankruptcy Court for the District of Delaware under Chapter 11 case number 19-12680.

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