Spansion files plan of reorganization and disclosure statement

By Angela McDaniels

Tacoma, Wash., Oct. 27 - Spansion Inc. filed its plan of reorganization and disclosure statement with the U.S. Bankruptcy Court for the District of Delaware on Monday.

As previously reported, the company agreed on the key economic terms of the plan with a group of holders of its senior secured floating-rate notes due 2013 and a committee of unsecured creditors.

Holders of the floating-rate notes will receive 14.5% of the common stock of the reorganized company, and holders of unsecured claims will receive 85.5% of the new common stock.

Spansion said it hopes to emerge from Chapter 11 bankruptcy late in the fourth quarter or in early 2010.

Creditor treatment

Under the plan, creditor treatment will include:

• Holders of secured creditor claims will enter into documentation with the company reflecting their post-effective date relationship;

• The UBS credit facility will remain in place, and the claims will be unaltered;

• Holders of floating-rate note claims will receive $100 million in cash plus post-bankruptcy interest, $250 million of new 4.75% convertible senior secured notes due 2016, $225 million of new 10¾% senior notes due 2014 and 6,703,033 shares of new common stock.

The company previously said that the new convertibles will be convertible into 24.9 million shares of new common stock at a purchase price of $10.01 per share;

• Holders of other secured claims will either have their claims reinstated or will receive cash or the collateral securing the claim;

• Holders of general unsecured claims will receive a share of general unsecured claims;

• Holders of convenience claims of $2,000 or less will recover 100% in cash;

• Holders of non-compensatory damages claims, old Spansion interests, securities claims and other old equity rights will receive no distribution; and

• Other old equity will be reinstated.

Spansion, a Sunnyvale, Calif.-based maker of flash memory products, filed for bankruptcy on March 1, 2009. Its Chapter 11 case number is 09-10690.

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