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CTI Foods wins court approval of pre-packaged plan of reorganization
By Caroline Salls
Pittsburgh, April 18 – CTI Foods, LLC’s pre-packaged plan of reorganization was confirmed Thursday by the U.S. Bankruptcy Court for the District of Delaware.
As previously reported, CTI reached an agreement with the majority of its lenders on a comprehensive balance sheet restructuring that will reduce the company’s debt by more than $400 million and provide “significant financial flexibility to support continued investments by the company on behalf of its customers.”
Under the plan, holders of first-lien term loan claims will receive 97% of the shares of common stock of reorganized Chef Holdings, Inc., subject to dilution from the new common shares issued under the management incentive plan and the backstop commitment fee. Holders will also receive a first-lien last-out tranche of loans issued under the exit term loan agreement, with a total principal amount of $50 million.
Holders of second-lien term loan claims will receive their proportional share of 3% of the new common shares subject to dilution and the backstop commitment fee.
Other general unsecured creditors will receive payment of their claims in full in the ordinary course of business.
Existing equity interests in Chef Holdings will be cancelled on the effective date.
Holders of debtor-in-possession term loan claims will receive an amount of a first-lien first-out tranche of loans equal to each DIP claim. They will also receive an exit fee equal to 1% of the aggregate principal amount of the DIP term loan facility to be paid pro rata in cash on the effective date.
CTI is a Meridian, Idaho-based provider of food products to national chain restaurants. The company filed bankruptcy on March 11 under Chapter 11 case number 19-10497.
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