Global Power Equipment files plan of reorganization

By Caroline Salls

Pittsburgh, Sept. 11 - Global Power Equipment Group Inc. filed a plan of reorganization and related disclosure statement Monday with the U.S. Bankruptcy Court for the District of Delaware.

The plan was filed in conjunction with the company's official committees of unsecured creditors and equity holders and an informal committee of Global Power noteholders, which hold roughly 94% of the company's senior subordinated notes.

As previously reported, the plan will be funded by a $90 million equity holders' rights offering available to all existing equity holders, and the rights offering will be backstopped by a group of existing equity holders.

All of the new common stock in the reorganized company will be distributed to existing equity holders on account of their existing equity interests and subscription to the rights offering.

The plan also includes a cash settlement with holders of 94% of the company's senior subordinated notes that satisfies all claims against the company's Deltak subsidiary through the establishment of a trust and a $34 million cash reserve.

Global Power expects to emerge from Chapter 11 as a private company.

Treatment of creditors under the plan will include:

• Holders of priority claims will receive full payment in cash;

• Holders of secured claims will either receive full payment on the plan effective date; full payment in installments, with claimants retaining their liens until they are paid in full; or proceeds from the sale of the collateral securing the claim;

• Holders of unsecured claims will receive full payment in cash, plus interest accrued from the bankruptcy filing date through the plan effective date;

• Holders of subordinated note claims will receive a share of cash from the noteholder settlement;

• Holders of WARN Act individual claims will receive a share of cash from a WARN Act individual settlement;

• Holders of WARN Act putative claims will receive a share of cash from a WARN Act putative claim settlement;

• Holders of equity interests will receive one share of new common stock in the reorganized company for each share of existing stock, as well as rights to purchase additional new common stock; and

• Holders of equity interests in the subsidiary debtors will retain their interests.

The company said it plans to obtain a new secured exit facility to repay its debtor-in-possession facility and to be used to fund working capital needs of the reorganized company.

A hearing on approval of the disclosure statement is scheduled for Oct. 9.

Global Power, a Tulsa, Okla., maker of gas turbine power plants and power-related equipment for industrial operations, filed for bankruptcy on Sept. 28, 2006. The Chapter 11 case number is 06-11045.

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