Ruby Tuesday gets bankruptcy court approval of disclosure statement

By Sarah Lizee

Olympia, Wash., Dec. 18 – RTI Holding Co., LLC (Ruby Tuesday) received approval of the disclosure statement for its Chapter 11 plan, according to a minute entry filed Friday in the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the plan reflects an agreement reached between the debtors and pre-petition secured creditors to follow a dual path under which the debtors will either reorganize via a consensual transaction that would provide for the debtors to emerge from Chapter 11 under new ownership by the pre-petition secured creditors or sell their assets as a going concern.

The debtors’ pro forma exit capital structure will consist of new common shares in RT Asset Co., an up to $10 million letter-of-credit facility, and an exit term loan equal to the lesser of (a) $30 million less 90% of the net sale proceeds in excess of $2.5 million, excluding any proceeds from the sale of RT Lodge Co., and (b) 1.2 times the agreed broker’s opinion of value of the debtors’ real property.

Under the plan, holders of non-tax priority claims will receive payment in cash in full.

Holders of miscellaneous secured claims will receive payment in cash in full or have their claims reinstated.

Unless holders of the DIP facility claims and pre-petition secured debt claims have been paid in full from net sale proceeds, holders of subclass 3A claims will receive up to $8 million of the exit facility, any GS adjustment equity, and 100% of the equity in RT Lodge.

And, unless it has been paid in full previously from net sale proceeds, each holder of a subclass 3B claim will receive the up to $9.5 million of the exit facility and 100% of the equity in RT Asset, less any GS adjustment equity, subject to dilution on account of the warrants and management incentive plan.

If a successful bid is selected after auction, proceeds of all asset sales will first be applied to the repayment in full of the pre-petition secured debt claims, and then the repayment of the DIP facility claims.

General unsecured claimholders will receive their pro rata share of the class 4 aggregate cash distribution.

Preserved intercompany claims will be reinstated, and other intercompany claims will be extinguished.

Dissenters claims and equity interests in the holding company will be extinguished.

Intercompany interests will be reinstated for purposes of the subsidiary structure maintenance.

Ruby Tuesday is a Knoxville, Tenn.-based foodservice retailer. The company filed Chapter 11 bankruptcy on Oct. 7 under case number 20-12456.

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