Meridian files amended plan that amends first-lien lender distribution, cuts exit financing amount

Note: A different report about Meridian Automotive was mistakenly included in the Oct. 10 issue of the Prospect News Bank Loan Daily. The correct report describing changes to the exit facility follows.

By Caroline Salls

Pittsburgh, Oct. 6 - Meridian Automotive Systems, Inc. filed a fourth amended plan of reorganization and related disclosure statement Friday with the U.S. Bankruptcy Court for the District of Delaware that changes the distribution to pre-bankruptcy first-lien lenders and decreases the amount of the proposed exit facility.

Under the amended plan, pre-bankruptcy first-lien claimants will receive new notes through a new $98 million term loan and 95.5% of the total shares of new common stock in the reorganized company. Previously, these creditors were slated to receive $98 million in cash and 95.5% of the new common stock.

If they vote to reject the plan, first-lien claimants will receive 100% of the new common stock and their share of pre-bankruptcy first-lien trust interests.

The $98 million term loan will have a six-year term and will have a junior-priority lien on substantially all of the assets of the reorganized company securing the proposed exit facility.

Interest on the term loan will be Libor plus 800 basis points.

The company will issue 2 million shares of new common stock under the plan.

Plan creditor treatment

Treatment of creditors under the plan will include:

• Holders of other secured claims will receive reinstatement of their claim or the collateral securing the claim;

• Holders of pre-bankruptcy first-lien claims will receive a share of new notes from a $98 million term loan and 95.5% of the total shares of new common stock in the reorganized company.

If this class does not vote to accept the plan, then 100% of the new common stock will be distributed to holders of pre-bankruptcy first-lien secured claims, as well as a share of pre-bankruptcy first-lien claim trust interests, which will entitle the holder to a share of net litigation trust recoveries.

Each pre-bankruptcy letter of credit will also be returned to the issuer undrawn and canceled;

• Holders of pre-bankruptcy second-lien secured claims will receive their share of 4.5% of the new common stock in the reorganized company, their share of new warrants and their share of the pre-bankruptcy second-lien claim trust interests, which will entitle holders to a share of the net litigation trust recoveries.

If this class rejects the plan, holders will receive their share of the second-lien trust interests, and 100% of the shares of new common stock will be distributed to pre-bankruptcy first-lien secured claimants;

• Holders of general unsecured claims will receive their share of the general unsecured claims trust interests, which will entitle the holder to a share of the net litigation trust recoveries;

• Holders of pre-bankruptcy subordinated claims, as well as pre-bankruptcy Meridian interests and intercompany claims, will receive no distribution.

Exit financing

Meridian said it expects to obtain up to $180 million in exit financing, instead of the $255 million previously expected, to consist of a $75 million senior secured revolving line of credit and a $75 million senior secured term loan, plus an up to $30 million synthetic letter-of-credit facility.

The company said it is in discussions with several lenders to arrange the exit financing.

A hearing to approve the disclosure statement is scheduled for Tuesday.

Meridian, a Dearborn, Mich., supplier of lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers, filed for bankruptcy on April 26, 2005. Its Chapter 11 case number is 05-11168.

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