Air Methods’ pre-packaged plan accepted by both voting classes

By Sarah Lizee

Olympia, Wash., Dec. 1 – Air Methods Corp.’s pre-packaged Chapter 11 plan was accepted by all voting creditors, according to tabulation summary filed Thursday with the U.S. Bankruptcy Court for the Southern District of Texas.

Specifically, all 416 holders of $1.27 billion of prepetition secured loan claims and all 123 holders of $47.44 million prepetition unsecured note claims who voted on the plan accepted it.

The combined hearing on final approval of the disclosure statement and confirmation of the Chapter 11 plan is scheduled for Dec. 6.

As background, the company entered into a restructuring support agreement with most of its first-lien lenders and bondholders and its equity sponsor, American Securities, LLC.

The restructuring aims to reduce the company’s total debt by about $1.7 billion, increase liquidity and position the business for long-term success by allowing it to focus on its growth and development strategies, Air Methods said.

The transaction will result in the injection of at least $175 million of new capital, which is contemplated to be fully backstopped by some members of the informal lender group, to ensure the company has minimum liquidity of $135 million, without impairing business operations and while satisfying general unsecured claims and claims of aircraft financing counterparties in full.

Air Methods said it has obtained the requisite support from its stakeholders to confirm the plan of reorganization and, due to this broad support, it expects to complete the process on an expedited basis and emerge from Chapter 11 by year-end.

As part of the process, Air Methods has obtained commitments for $80 million of new-money debtor-in-possession financing from the first-lien lenders party to the RSA. The DIP financing will also include $75 million of prepetition debt.

Other priority claims, other secured claims, prepetition securitization program claims, SICFA claims, prepetition aircraft financing claims, general unsecured claims, intercompany claims and intercompany interests will be unimpaired by the plan.

Holders of prepetition secured loan claims are expected to receive a 16% recovery via their pro rata share of an equity distribution and rights offering subscription rights. Holders will have the option to elect an equity cash-out option.

Holders of prepetition unsecured note claims are expected to receive a recovery of 1% via their pro rata share of a recovery pool and warrants. These holders also can elect an equity cash-out option.

The Denver-based air medical service provider filed Chapter 11 bankruptcy on Oct. 24 under case number 23-90886.

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