EveryWare U.S. trustee asks court to deny ‘confused’ pre-packaged plan

By Kali Hays

New York, May 13 – EveryWare Global, Inc.’s U.S. Trustee Andrew R. Vara objected to confirmation and approval of the company’s joint pre-packaged restructuring plan and related disclosure statement on Wednesday, according to a filing with the U.S. Bankruptcy Court of the District of Delaware.

As previously reported, the plan proposes a financial restructuring that cancels roughly $248 million of EveryWare’s long-term debt in exchange for common stock representing 96% of the company’s post-emergence common stock.

Vara claims that EveryWare has “confused a ‘pay in full’ plan with a ‘ride through’ plan” and that if the plan is actually intended as “ride through” plan “numerous provisions of the plan are unnecessary, inappropriate, or both.”

“If, on the other hand, the debtors mean to propose a ‘pay in full’ plan, then the debtors must correctly go through the claims filing and allowance process...and cannot treat the plan confirmation process as a mix-and-match blend of these two distinct processes,” Vara said in the objection.

Specifically, Vara alleges that EveryWare’s plan does will not pay numerous classes of claims in full as it claims. Instead, “by carefully crafting the definition of the word ‘allowed’ the debtors have impaired all priority claims, general unsecured claims and at least three other classes of claims.”

In order for a claim to be allowed under the proposed plan, a creditor must file a proof of claim, but as EveryWare obtained an order waiving a requirement to file schedules, there is no claims bar date and “the vast majority of creditors have received notice of neither the plan nor the necessity to file a claim,” according to the objection.

Beyond depriving creditors the opportunity to participate in the confirmation process, Vara said that the proposed plan is “rife” with provisions contrary to Bankruptcy Code that “further impair the rights of the purportedly unimpaired classes.”

Considering his objections, Vara asked that the court deny approval of the disclosure statement and confirmation of the plan and that EveryWare be ordered to file an “appropriate” motion.

A hearing to consider the plan and disclosure statement is scheduled for May 20.

EveryWare Global is a Lancaster, Ohio-based supplier of food preparation products that filed bankruptcy on April 7. The Chapter 11 case number is 15-10743.

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