Meridian Automotive files third amended plan to change first-lien lender distribution

By Jennifer Lanning Drey

Eugene, Ore., July 19 - Meridian Automotive Systems filed a third amended joint plan of reorganization and related disclosure statement Wednesday with the U.S. Bankruptcy Court for the District of Delaware that amends treatment options for first-lien claimants for the second time.

Under the amended plan, holders of pre-bankruptcy first-lien claims can choose from an 80% cash and 20% preferred equity option or $75 for every $100 stated value of class A convertible preferred stock, plus consent fees.

The consent fee will be payable in cash at a rate of $0.50 per each $100 of the claim.

Under the previous plan, these creditors had a choice of 80% cash and 20% preferred equity option or 95% in cash plus consent fees. Originally these creditors had the choice of an all-cash recovery, cash and third-lien notes recovery or cash and class A convertible preferred stock recovery.

As in the previous plan, second-lien secured creditors will receive all the new common stock in the reorganized company. They will also have the right to purchase a number of shares of class A preferred stock not issued to first-lien claimants.

Under the previous plan, these creditors could purchase their pro rata share of class A preferred stock.

Second-lien secured claims that are committed holders will also receive a share of an $8 million commitment fee, or a funding agreement payable in additional shares of class A preferred stock.

Plan creditor treatment

Treatment of creditors under the plan will include:

• Holders of $300.6 million in pre-bankruptcy first-lien claims who vote to accept the plan will receive either 80% cash and 20% preferred equity option or $75 for every $100 of Class A stated value of Class A convertible preferred stock, plus consent fees.

• Holders of $55 million in pre-bankruptcy second-lien secured claims will receive their share of new common stock in the reorganized company, rights to purchase a number of shares of class A convertible preferred stock not purchased by first-lien claimants, and their share of an $8 million total commitment fee, or a funding agreement payable in additional shares of class A preferred stock.

• Holders of $125 million in pre-bankruptcy second-lien deficiency claims will receive their share of pre-bankruptcy second-lien claim trust interests, which will entitle them to receive cash recoveries on some avoidance actions contributed to a litigation trust;

• Holders of $96 million in general unsecured claims will receive their share of general unsecured claims trust interests and contingent value rights;

• Holders of $172.9 million in pre-bankruptcy subordinated claims may receive their share of subordinated claims trust interests, funded by avoidance action and reserve action net cash recoveries and litigation trust distributions and their share of contingent value rights after all first-lien and second-lien claims have been paid;

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

Meridian said it plans to obtain up to $375 million in exit financing, including a $175 million revolving loan commitment and a $200 million term loan commitment.

Meridian, a Dearborn, Mich., supplier of lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers, filed for bankruptcy on April 26, 2005. Its Chapter 11 case number is 05-11168.

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