Wornick obtains court OK for plan of reorganization; emergence expected in early July

By Jennifer Lanning Drey

Portland, Ore., June 27 - Wornick Co. was granted court approval for its plan of reorganization by the U.S. Bankruptcy Court for the Southern District of Ohio, according to a Friday filing.

Under the plan, the equity in reorganized Wornick will be sold to Viren Acquisition Corp., a company owned by the holders of about 85% of Wornick's senior secured notes.

Wornick will emerge from bankruptcy upon the closing of the sale, which it expects will be in early July, according to a company news release.

"Viren's shareholders are well capitalized and committed to investing in our long-term growth and success," Jon Geisler, chief executive officer of Wornick, said in the release.

"Upon our emergence from Chapter 11, Wornick will have a much stronger balance sheet. We will have the resources to take full advantage of the fundamental strength of the business and our leading market position."

The company will have a new seven-member board of directors upon its emergence from bankruptcy.

Creditor treatment

Treatment of creditors under the plan will include:

• Holders of $12 million in administrative claims, $100,000 in priority tax claims, $35 million in DIP financing claims, $1 million in general unsecured claims and $1.7 million in other priority claims will recover 100% in cash;

• Holders of other secured claims will recover 100% either in cash, reinstatement of their claim or through the return of the collateral securing the claim;

• Holders of $140.22 million in senior secured note claims will recover 36% through their share of $50 million in cash, provided, however, that if the noteholder group is the successful bidder for the company's equity, the cash recoveries that the DDJ entities and the members of the secured noteholder group would be entitled to receive on account of their senior secured note claims will be deemed to have been immediately contributed to the capital of the buyer and credited against the purchase price, or, under the amended plan, if any other holder of a senior secured note claim is the successful bidder or holds an ownership interest in the buyer, that noteholder can choose to direct Wornick to apply the noteholder's cash recoveries toward the purchase price;

• All intercompany claims will be adjusted, continued or discharged with the consent of the equity purchaser;

• Holders of $38 million in TWC note claims, holders of subordinated securities claims and holders of equity interests in non-surviving debtors and Wornick will not receive any distribution under the plan; and

• Holders of equity interests in surviving debtors will retain their interests.

Wornick, a Cincinnati-based food processing and packaging company, made a pre-packaged bankruptcy filing on Feb. 14. Its Chapter 11 case number is 08-10654.

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