EZ Lube files plan; lenders, unsecured creditors to get new units

By Caroline Salls

Pittsburgh, Aug. 17 - EZ Lube, LLC filed its plan of reorganization and related disclosure statement Thursday with the U.S. Bankruptcy Court for the District of Delaware, according to a court filing.

Under the plan, the company will convert $94.5 million of claims into various units of reorganized EZ Lube.

Specifically, $40 million in preferred units will be issued to pre-bankruptcy lenders, debtor-in-possession facility lenders and exit financing lenders, and 5,010 common units will be issued to holders of second-lien lender claims, mezzanine debt claims, trade vendor unsecured claims and general unsecured claims.

EZ Lube said it plans to obtain a $42 million exit facility from Goldman Sachs Specialty Lender Group, LP, consisting of a $40 million term loan and a $2 million revolving credit facility.

The company said GSSLG and its other participating DIP facility lenders will convert $40 million of their DIP loans to exit financing, and the other $22.5 million will be exchanged for preferred shares.

Plan creditor treatment will include:

• Holders of administrative claims and priority non-tax claims will recover 100% in cash;

• Holders of priority tax claims will recover 100% in cash on the plan effective date or over a five-year period with simple interest;

• Holders of non-participating pre-bankruptcy lender claims and non-participating DIP claims will be paid in full from the proceeds of the exit facility;

• Holders of participating pre-bankruptcy lender claims will receive new preferred interests in the reorganized company;

• Holders of DIP lender claims will receive exit financing proceeds for claims up to $40 million and will receive new preferred interests for claims in excess of $40 million;

• Holders of secured claims of second-lien lenders, mezzanine debtholder claims, unsecured critical trade vendor claims and general unsecured claims will receive new common interests in the reorganized company;

• Holders of miscellaneous other secured claims will receive either cash equal to the value of the collateral securing the claim or the return of the collateral;

• Holders of unsecured convenience claims of $5,000 or less will recover 25% in cash; and

• Existing interests will be cancelled and holders will receive no distribution.

The disclosure statement hearing is scheduled for Sept. 11.

EZ Lube, a Santa Ana, Calif.-based quick lube operator, filed for bankruptcy on Dec. 9, 2008. Its Chapter 11 case number is 08-13256.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.