Jason Industries files bankruptcy to implement first-lien lender deal

By Caroline Salls

Pittsburgh, June 24 – Jason Industries, Inc. made a pre-packaged Chapter 11 bankruptcy filing on Wednesday in the U.S. Bankruptcy Court for the Southern District of New York to implement a pre-packaged plan based on a previously announced restructuring support agreement with holders of 87% of its first-lien debt, according to a company news release.

Once completed, Jason said the restructuring plan will deleverage its balance sheet by $250 million.

The company said it expects its day-to-day operations to continue without interruption and without disruption to its employees, customers, suppliers and vendors.

As part of the plan, Jason said its first-lien lenders consented to the use of their cash collateral to enable the company to operate its business and minimize the effect of the restructuring for the benefit of stakeholders.

The company said it began the formal process of soliciting votes on the plan from lenders on Wednesday, and it already has support for the plan from the vast majority of its first-lien lenders.

Through the Chapter 11 cases, Jason said it is seeking court approval to continue employee wages and benefits without interruption and pay for goods and services provided to the company.

As previously reported, the plan will provide no impairment of general unsecured trade creditors.

“We have aggressively taken steps to simplify Jason and improve the performance and financial strength of our company over the past three years,” chief executive officer Brian Kobylinski said in the release.

“While these actions have generated positive momentum, we were not able to realize the full benefits of our plans due to market cyclicality and disruptions brought on by the Covid-19 global pandemic.

“Directly addressing our balance sheet will enable Jason and its operating businesses, Osborn and Milsco, to build upon our improved operational foundation and reap the benefits of recent cost-reductions and new business wins.”

According to court documents, Jason had $204.89 million in total assets and $428.37 million in total debt as of June 24.

The company’s largest unsecured creditor is Wilmington Savings Fund Society, FSB of Wilmington, Del., with a $94.62 million second-lien loan claim.

No other unsecured creditors were listed with claims of $1 million or more.

Moelis & Co. LLC is acting as financial adviser, Kirkland & Ellis LLP is acting as legal counsel, and AlixPartners, LLP is acting as restructuring adviser to the company in connection with the restructuring.

Milwaukee-based Jason is the parent company of a global family of manufacturers in the finishing, components, seating and automotive acoustics markets. The Chapter 11 case number is 20-22766.

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