Air Methods’ pre-packaged Chapter 11 plan confirmed by court

By Sarah Lizee

Olympia, Wash., Dec. 6 – Air Methods Corp.’s pre-packaged Chapter 11 plan was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas on Wednesday, according to an order.

As previously reported, the plan was accepted by all voting creditors. 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.

“We look forward to moving ahead with a substantially stronger balance sheet and additional financial flexibility as we continue providing industry-leading air medical service to our health care partners, communities, customers and patients,” chief executive officer JaeLynn Williams said in a press release.

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 company has lined up a $250 million backstopped five-year exit facility from members of the informal lender group. The facility consists of $175 million in term loans and $75 million of converted debtor-in-possession term loans.

The facility bears interest at SOFR plus 900 basis points per annum, payable in cash.

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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