Aspect Software second amended reorganization plan confirmed by court

By Caroline Salls

Pittsburgh, May 25 – Aspect Software’s second amended plan of reorganization was confirmed Wednesday by the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Aspect filed Chapter 11 bankruptcy to implement a pre-arranged agreement with lenders under which the company will reduce more than $320 million of debt and obtain new secured financing and an infusion of convertible debt.

Aspect said the arrangement calls for a financial restructuring and replacement of its existing credit facilities.

The company said the arrangement is principally led by affiliates and funds of GSO Capital, a unit of the Blackstone Group, Guggenheim Partners Investment Management, LLC and MidOcean Credit Partners.

Aspect said the debt arrangement addresses its capital structure challenges by eliminating $320 million of second-lien debt, equitizing $60 million of first-lien claims and providing the company with access to $60 million through a rights offering.

Under the restructuring, holders of $60 million of first-lien claims held by backstop parties and potentially some holders of first-lien revolving credit facility claims will equitize $60 million of first-lien claims and receive 100% of the equity in reorganized Aspect, subject to dilution on account of a new money investment offered to the holders of second-lien notes claims.

Holders of first-lien revolver claims that are not equitized and who agree to participate on a dollar-for-dollar basis in the new first-lien revolver will have their pre-bankruptcy first-lien revolver claims paid in full in cash.

All other first-lien claims will receive their share of an amended and restated senior secured first-lien term loan in the principal amount of $386 million, cash in an amount equal to the amount of first-lien revolving claims that are being equitized and cash in an amount equal to the amount of first-lien revolver claims for which the holders do not agree to participate in the new first-lien revolver.

Holders of second-lien note claims will receive the right to participate in a $60 million new money investment for new 3% holding company payment-in-kind securities that will convert into 25% of the equity in reorganized Aspect under specified circumstances.

Holders of general unsecured claims will be paid in full in cash.

Holders of existing equity in Aspect will not receive any recovery.

Based in Phoenix, Aspect is a cloud provider of fully integrated consumer engagement, workforce optimization and back-office solutions. The company filed for Chapter 11 protection on March 9 under case number 16-10597.

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