Smarte Carte acquired by Black Diamond after emergence from Chapter 11

By Caroline Salls

Pittsburgh, June 1 - Smarte Carte Corp. was acquired by Black Diamond Capital Management, LLC following Smarte Carte's emergence from Chapter 11 bankruptcy, according to a company news release.

Black Diamond, a Lake Forest, Ill., alternative asset management firm, received 76% of Smarte Carte's new common stock.

The emergence resulted in a reduction in Smarte Carte's debt to $14 million from $192 million.

"We believe that Smarte Carte is an outstanding company with excellent management that has been hindered in the past by high levels of debt," Black Diamond partner Christopher Kipley said in the release.

"Going forward our role will be to help Smarte Carte take better advantage of its strong presence in the marketplace and to grow its business."

Under the reorganization plan, Smarte Carte's bank lenders will receive 78.3% of the stock in the reorganized company and holders of the senior notes will receive 21.7%. But bank creditor HVB will be paid in full in cash.

The plan includes a $20 million exit facility, increased from the $10 million originally planned. Black Diamond Commercial Finance, LLC and General Electric Capital Corp. are providing the facility.

Smarte Carte, a St. Paul, Minn., airport cart operator, made a prepackaged Chapter 11 filing on Feb. 11 with the U.S. Bankruptcy Court for the District of Delaware. Its case number was 05-10395.

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