QualTek emerges from Chapter 11 bankruptcy, cuts $307 million of debt

By Sarah Lizee

Olympia, Wash., July 17 – QualTek Services Inc. emerged from Chapter 11 bankruptcy on Friday, according to a press release.

Its plan of reorganization was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas on June 30, as previously reported.

The plan was supported by all major credit stakeholders, including 100% of voting secured debt holders and 100% of voting convertible noteholders.

Through its financial restructuring, the company reduced its debt by about $307 million, entered into a $101 million asset-based lending exit facility, and received $25 million of new money exit term loans.

Following emergence, QualTek will operate as a privately held company under the ownership of its prepetition lenders and management.

Equity shares of the pre-emergence company have been canceled and are no longer publicly trading.

The company will be led by the existing management team alongside a newly formed board of directors.

QualTek has a newly constituted five-member board of directors. Chief executive officer and founder Scott Hisey will be joined by Todd Clegg, Daniel Lafond and Emanuel Pearlman. The fifth board member is to be named at a later date.

Kirkland & Ellis LLP and Jackson Walker LLP served as legal counsel, Jefferies served as investment banker, and Alvarez & Marsal served as financial adviser to the company.

The plan was supported by an informal group of term lenders represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel, Houlihan Lokey Capital, Inc. as investment banker and Accordion Partners, LLC as financial adviser.

The plan was also supported by Fortress Investment Group LLC, the largest holder of convertible notes, represented by Davis Polk & Wardwell LLP as counsel and Solomon Partners, LP as financial adviser.

QualTek is a Blue Bell, Pa.-based provider of turnkey services to the North American telecommunications, infrastructure and power industries. The company filed bankruptcy on May 24 under Chapter 11 case number 23-90584.

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