Allen Systems Group first amended plan of reorganization confirmed

By Caroline Salls

Pittsburgh, March 27 – Allen Systems Group, Inc.’s first amended plan of reorganization was confirmed Friday by the U.S. Bankruptcy Court for the District of Delaware, according to a court filing.

As previously reported, Allen Systems reached an agreement with its senior secured lenders for its comprehensive debt restructuring through a pre-packaged Chapter 11 process.

Under the plan, the company’s long-term debt will be reduced by $420 million, and the remaining debt of $240 million will be refinanced at a much lower interest rate, the company said.

Upon emergence from Chapter 11, it is expected that Allen’s senior secured lenders will hold a controlling interest in the company.

In order to fund the plan, Allen will enter exit facilities, including a $15 million first-lien revolving loan facility and a $240 million first-lien term loan facility. The term facility will include a $40 million first-out and $200 million last-out facility.

First-out and last-out notes will be issued in connection with the first-lien exit credit agreement.

The company will also complete a $130 million rights offering in exchange for stock representing 58.5% of its new common stock.

Creditor treatment

Treatment of creditors under the plan will include the following:

• DIP facility claims will be satisfied in full through the issuance of first-out notes;

• Holders of secured tax claims, administrative claims and other priority claims will be paid in full in cash;

• Other secured claims will be reinstated or holders will receive collateral;

• Holders of domestic credit facility claims will receive last-out notes in amounts provided in the exit facility commitment and cash;

• Holders of notes claims will receive a share of notes claims stock and, if they are an eligible holder of notes claims, subscription rights for rights offering stock;

• Holders of other unsecured claims will be paid in full in cash;

• Holders of Allen Systems Group interests and section 510(b) claims will receive no distribution; and

• Intercompany claims and intercompany interests will be unaltered.

Allen Systems provides business automation software and is based in Naples, Fla. The company filed bankruptcy on Feb. 18 under Chapter 11 case number 15-10332.

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