Otter Tail files amended plan, secures up to $4 million investment

By Caroline Salls

Pittsburgh, June 10 - Otter Tail Ag Enterprises, LLC filed an amended plan of reorganization and related disclosure statement Wednesday with the U.S. Bankruptcy Court for the District of Minnesota that changes the proposed distribution for several creditor classes.

Under the amended plan, holders of U.S. Bank NA revenue bond indenture trustee claims will receive $6.5 million on the plan effective date, up from $2.5 million within 60 days of the effective date; holders of Otter Tail County general obligation bond administrator claims will receive 4.5 million membership units worth $2.25 million, compared with receiving $751,250 under the previous plan; and holders of general unsecured claims and rejection claims will be paid at least 32.5% of the value of their claims, up from 12.5%.

As previously reported, the plan is designed to restructure the company's capital structure to improve cash flow and strengthen Otter Tail's balance sheet by reducing its overall debt.

The company said it will service its debts from a new $12 million equity investment, from the continued cash flow generated from its business operations and from settling revenue bond trustee, Otter Tail County and unsecured claims.

Otter Tail said the proposed $12 million new investment will come in two components, including a $2 million to $4 million investment from strategic partner CHS Inc. and through new contributions to be raised primarily from existing equity members.

According to the amended disclosure statement, the new capital is a condition to the plan taking effect and is a condition to the company's senior lenders approving the plan.

Treatment of creditors will include:

• Holders of AgStar secured claims and NMF secured claims will be paid in full under modified credit agreement terms;

• Holders of U.S. Bank NA revenue bond indenture trustee claims will receive $6.5 million on the plan effective date;

• Holders of Otter Tail County general obligation bond administrator claims will receive 4.5 million membership units worth $2.25 million;

• Holders of general unsecured claims and rejection claims will be paid at least 32.5% of their claims;

• Holders of unsecured convenience claims will be paid in full; and

• Equity interests will be cancelled.

Otter Tail, a Fergus Falls, Minn., ethanol company, filed for bankruptcy on Oct. 30, 2009. Its Chapter 11 case number is 09-61250.

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