United Subcontractors emerges from bankruptcy with reduced debt

By Caroline Salls

Pittsburgh, June 30 - United Subcontractors, Inc. emerged from Chapter 11 bankruptcy when its plan of reorganization took effect on Tuesday, according to a company news release.

"In reaching this final milestone, we have emerged from our restructuring with a strengthened financial position and with, in essence, a debt free balance sheet," chief executive officer Paul Lustig said in the release.

"Our expeditious financial restructuring is a testament to the strength of our underlying business.

"We are excited to move forward and capitalize on future opportunities as a financially stronger company."

United Subcontractors' plan was confirmed on June 25 by the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the holders of the company's first-lien loans due 2012 and its second-lien loans due 2013 agreed on a financial restructuring that reduces funded debt by $314 million through the conversion of debt to equity.

United Subcontractors said last week that it has more than $30 million of cash on hand, which combined with the cash generated from ongoing operations, will be more than sufficient to run the business and fund normal business obligations.

Creditor treatment

Creditor treatment under the plan will include:

• Holders of $5 million in administrative claims, $500,000 in priority tax claims and $3.5 million in miscellaneous priority claims will recover 100% in cash;

• Holders of subsidiary interests will retain their interests but will receive no distribution under the plan;

• Holders of $14.2 million in general unsecured claims will recover 100% either in cash or through reinstatement of their claim;

• Holders of $290.1 million in first-lien secured claims will receive their share of 96% of the new common stock in the reorganized company and $22.5 million of new six-year senior secured notes;

• Holders of $66.45 million in second-lien secured claims will receive their share of 4% of the new common stock in the reorganized company;

• Holders of $2 million in rejection claims will recover 5% through their share of the lesser of $125,000 and 5% of the total amount of all rejection claims; and

• Holders of old USI Holdings common stock and interests and insider claims will receive no distribution under the plan.

United Subcontractors, an Edina, Minn.-based installer of residential and commercial insulation systems and provider of related products and services, filed for bankruptcy on March 31. The Chapter 11 case number is 09-11150.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.