O'Sullivan Industries emerges from Chapter 11, closes on $50 million exit facility

By Caroline Salls

Pittsburgh, April 11 - O'Sullivan Industries, Inc. emerged from Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Northern District of Georgia Tuesday, according to a company news release.

The company's plan of reorganization was confirmed on March 16.

"O'Sullivan emerges from Chapter 11 with new ownership, a very manageable debt load, leaner more efficient operations and a renewed focus on our customers and consumers," interim chief executive officer Rick Walters said in the release.

As part of its emergence from Chapter 11, O'Sullivan closed on its up to $50 million revolving credit facility exit financing agreement and drew $27.3 million of the exit facility.

Also, $2.7 million of letters of credit are outstanding under the loan agreement.

Proceeds will used to repay amounts borrowed under the company's debtor-in-possession credit agreement, to pay fees and expenses related to its bankruptcy process and to provide working capital.

In addition, O'Sullivan issued $10 million of its secured notes to the former holders of its senior secured notes, as provided in its plan of reorganization.

The plan incorporates a cash payment for general unsecured creditors and a potential additional settlement for all vendors and utility providers electing to participate, a warrant offering for the company's 13 3/8% senior subordinated notes due 2009 and the conversion of its secured notes into substantially all of the equity of the reorganized company and $10 million of new secured notes.

O'Sullivan's new board of directors is comprised of Rick Walters; Tom Shandell, founding partner and portfolio manager of GoldenTree Asset Management; Michael Ranson, director of Capital Solutions Group, GoldenTree Asset Management; Eugene Davis, chairman and CEO of Pirinate Consulting Group LLC; and James Malone, founding managing partner of Qorval LLC.

O'Sullivan, a Lamar, Mo., manufacturer of ready-to-assemble furniture, filed for bankruptcy on Oct. 14. Its Chapter 11 case number is 05-83076.

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