Gibson Brands disclosure statement OK’d; plan hearing set for Sept. 27

By Caroline Salls

Pittsburgh, Aug. 2 – Gibson Brands Inc. announced Wednesday that the U.S. Bankruptcy Court for the District of Delaware approved the disclosure statement for its Chapter 11 plan.

Gibson said the order allows it to begin the process of soliciting votes on the plan of reorganization and ultimately to seek an order confirming the plan.

The company said the plan is supported by the official committee of unsecured creditors appointed for its Chapter 11 case, which recommended that all general unsecured creditors vote in favor of the plan.

Gibson said plan materials and ballots are expected to be mailed during the week of Aug. 6. The deadline for returning completed ballots will be Sept. 14. The plan confirmation hearing is scheduled for Sept. 27.

As previously reported, the company signed a restructuring support agreement with its noteholders and its principal shareholders.

The reorganized debtors will be financed by an asset-based loan facility, which is expected to be undrawn on the plan effective date and available for working capital purposes, as well as exit financing in an amount necessary to pay off Gibson’s debtor-in-possession facility.

However, the DIP lenders may elect to convert all or a portion of the obligations into new equity at a price per share equal to 80% of the plan’s valuation of that equity.

Noteholder claims are expected to be converted into substantially all of the equity of the reorganized Gibson debtors.

Holders of general unsecured claims against Gibson Holdings Inc. will receive a share of $2.75 million in cash and litigation trust beneficial interests.

Holders of other general unsecured claims that are not paid in the ordinary course of business will receive a distribution in an amount at least equal to the amount necessary to satisfy provisions of the Bankruptcy Code.

Holders of convenience class claims will recover 50% in cash, subject to a total cap of $1 million.

Equity interests will be cancelled under the plan.

Gibson Brands is a Nashville-based maker of musical instruments and consumer and professional audio. The company filed bankruptcy on May 1 under Chapter 11 case number 18-11025.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.