OFS International unsecured creditors say they support amended plan

By Sarah Lizee

Olympia, Wash., Dec. 6 – OFS International, LLC’s official committee of unsecured creditors said it has agreed to support the company’s Chapter 11 plan, based on the company’s agreement that some modifications will be made, according to a statement filed Friday with the U.S. Bankruptcy Court for the Southern District of Texas.

The modifications provide that the initial general unsecured creditors distribution will be increased to $2 million from $1.25 million.

The class 8 general unsecured claim held by Konstantin Semerikov will be subordinated and will not receive any distribution until all plan payments have been made to class 8 general unsecured claims.

The definition of “plan payments” will mean the cumulative sum of $2.75 million, composed of payments in the amount of $2.5 million with interest accruing from the effective date at an interest rate of 5% per annum, amortized over 36 months, with the first payment due no later than seven months after the effective date and subsequent payments to be made quarterly after that, and an additional $250,000 payment to be paid three years after the effective date.

The committee said it understands that the debtors will seek to make these modifications through a proposed confirmation order that will be filed shortly.

The plan confirmation hearing is scheduled for Dec. 9.

Plan terms

According to the disclosure statement, the plan will be implemented with funds available from one or more new term loans secured by the debtors’ real estate, one or more new revolving credit facilities secured by the debtors’ non-real estate assets, available cash on hand as of the effective date, a new value contribution, and future revenues generated by the reorganized debtors’ business operations.

The company said the debtors have received multiple term sheets for refinancing their real estate and non-real estate assets and are in the process of negotiating and finalizing the best terms available.

Under the plan, the holder of the debtor-in-possession facility will receive a cash payment equal to the remaining amount of its claim.

The holders of the PAO TMK secured claim will have an allowed secured claim in the amount of $17.6 million, which will be paid in cash in full.

Secured tax claims will be paid in full in cash.

Holders of secured equipment claims will have their claims reinstated or receive other treatment leaving their claims unimpaired.

Holders of priority claims will receive payment in full in cash.

The PPP claim will be reinstated.

Holders of convenience claims will receive payment in full in cash.

Holders of general unsecured claims will receive their pro rata share of the initial GUC distribution and the plan payments.

In exchange for the new value contribution, which is $350,000 in cash, all interests will be reinstated.

The Houston-based company provides oil company tubular goods and services. The company filed bankruptcy on May 31, 2021 under Chapter 11 case number 21-31784.

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