Merisant files amended plan to address bank claim conversion

By Caroline Salls

Pittsburgh, Oct. 21 - Merisant Worldwide, Inc. filed an amended plan of reorganization and related disclosure statement Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

Under the amended plan, bank claims will be exchanged for $150 million in new bank notes and bank cash. If the holders elect to convert a portion of their bank claims, they will also receive new bank shares.

Specifically, majority bank claim holder Wayzata Investment Partners will effectively back-stop the conversion by agreeing to convert an additional portion of its bank claims for bank shares to the extent other holders do not convert their claims for shares.

As a result, Merisant said $45 million of bank claims will be converted.

Under the original plan, these creditors were slated to receive new bank notes and bank cash and the majority holder was scheduled to receive new convertible preferred stock in the reorganized company.

Also under the plan, holders of unsecured claims will receive 5.5% of the new common stock in the reorganized company and be eligible to participate in a rights offering for 50,000 shares of series A-2 convertible preferred stock at a subscription price of $100 per share.

The original plan called for a rights offering for 500,000 shares of convertible preferred stock at a subscription price of $10 per share.

In addition, Newport Global Advisors LP has agreed to buy $7.5 million of the new convertible preferred stock under an equity investment agreement and backstop $2.5 million of the rights offering.

Creditor treatment

Plan creditor treatment will include:

• Holders of administrative expense claims, debtor-in-possession facility claims and priority tax claims will recover 100% in cash;

• Other secured claims will be either reinstated or paid in cash at the company's option;

• Holders of bank claims will recover 100% in new bank notes, bank cash and new bank shares, if they elect to convert a portion of their bank claims;

• Holders of Merisant Co. unsecured claims will receive 5.5% of the new common stock, the right to participate in the rights offering and the right to participate in a private investment;

• Holders of Merisant Worldwide unsecured claims will receive their share of class 5 contingent vehicle rights or the option to participate in the private investment;

• Holders of trade claims will recover 60% in cash if they vote to accept the plan or a lesser cash distribution if they vote to reject it and the court finds that the treatment of trade claims does not comply with the Bankruptcy Code;

• Intercompany claims will be either reinstated or discharged and extinguished in full or in part, at the reorganized company's option;

• Holders of equity interests will receive no distribution; and

• Subsidiary interests will be reinstated.

The disclosure statement hearing is scheduled for Oct. 23, and the plan confirmation hearing will be held on Dec. 16.

Merisant, a Chicago-based marketer of low-calorie tabletop sweeteners, filed for bankruptcy on Jan. 9, 2009. Its Chapter 11 case number is 09-10059.

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