Wornick emerges from bankruptcy with $35 million exit financing facility

By Jennifer Lanning Drey

Portland, Ore., July 10 - Wornick Co. emerged from bankruptcy Thursday after closing on the sale of the equity in the reorganized Wornick to a company owned by holders of about 85% of Wornick's senior secured notes, according to a company news release.

Wornick also closed on a $35 million exit financing facility that is being provided from funds and accounts managed by DDJ Capital Management, LLC. The exit financing includes a $10 million term loan and $25 million in revolving credit facilities.

"We accomplished what we set out to do at the beginning of this process. We reduced our burdensome long-term debt and restored our financial stability," Jon Geisler, president and chief executive officer of Wornick, said in the release.

"We have made significant improvements to our operations and with a more appropriate level of debt, we can utilize our resources to make the necessary investments to improve and grow our business," he said.

Creditor treatment

As previously reported, creditor treatment under Wornick's plan of reorganization includes:

• 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;

• 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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