U.S. Shipping disclosure statement approved; plan hearing Oct. 1

By Caroline Salls

Pittsburgh, Aug. 26 - U.S. Shipping Partners, LP received court approval of the disclosure statement for its plan of reorganization, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The plan confirmation hearing is scheduled for Oct. 1.

Under the plan, the company's senior secured lenders will receive $225 million of new senior secured term notes due Aug. 7, 2013, $75 million of new junior secured term notes due Aug. 7, 2013 and all of the reorganized company's class A common stock, which will represent half of the company's outstanding common stock.

The senior notes will bear interest at a rate of Libor plus 730 basis points, subject to a 2% Libor floor, and the junior notes will bear interest at Libor plus 50 bps, subject to a 2% Libor floor.

Also under the plan:

• Holders of the company's second-lien notes will receive shares of class B common stock, representing half of the reorganized company's outstanding stock;

• Holders of existing common units, subordinated units and general partnership interests will receive no distribution;

• Senior secured lenders that are not U.S. citizens will receive a combination of class A common stock and warrants to purchase class A common stock, and second-lien noteholders that are not U.S. citizens will receive a combination of class B common stock and warrants to purchase class B common stock.

The warrants will have an exercise price of $0.001 per share and will expire on Dec. 31, 2029; and

• Reorganized U.S. Shipping will adopt a management equity plan under which members of management will receive 18.18% of the class B common stock, representing 10% of the reorganized company's outstanding common stock.

U.S. Shipping is an Edison, N.J.-based provider of long-haul marine transportation services. It filed for bankruptcy on April 30. Its Chapter 11 case number is 09-12711.

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