Kasper creditors, equity committees agree to accept reorganization plan

By Carlise Newman

Chicago, Nov. 12 - Kasper A.S.L. Ltd. said its creditors' committee and the equity committee reached a comprehensive agreement on the distribution of the proceeds in the company's reorganization plan. Both the committees agreed to recommend that holders of senior note claims, general unsecured claims and equity interests vote to accept the plan.

Kasper also announced that Jones Apparel Group Inc. agreed to increase its purchase price for the company by $17 million subject to support for the plan by the creditors committee and certain large holders of the company's senior notes; support by the equity committee and certain large holders of the common stock of the company; the confirmation of the plan; and closing of the sale to Jones by Dec. 5.

The adjusted purchase price consists of $221 million in cash and the assumption of pre-paid royalties projected to be $11.5 million at closing, for a value of $232.5 million

As a result of the plan, holders of senior note claims will receive $165 million while other claims are expected to be paid in full plus interest. Equity interests will receive $46 million, or $6.80 per share.

Distributions will be made over time as claims are liquidated and escrows are released. The expected distributions are net of an escrowed amount of $7.2 million, or $1.07 per share, which may be available for distribution in the future.

The company also announced that the voting deadline for equity interests is extended to Nov. 17, and that the company may seek the authority of the bankruptcy court to extend the voting deadline for senior note and general unsecured claims to that date or later. The confirmation hearing continues to be set for Nov. 19.

New York-based Kasper manufactures women's apparel.

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