Monitronics gets interim access to DIP loan; plan hearing June 26

By Sarah Lizee

Olympia, Wash., May 17 – Monitronics International, Inc. received interim approval to access $387 million in debtor-in-possession financing from existing lenders, according to an order filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Texas.

Additionally, the court scheduled a combined hearing on confirmation of the company’s pre-packaged Chapter 11 plan and final approval of the related disclosure statement for June 26.

The company, which is also known as Brinks Home, filed bankruptcy on Monday after entering into a restructuring support agreement with lenders holding about 78% of its outstanding funded debt and holders of a majority of its equity.

The restructuring aims to reduce the company’s debt by roughly $500 million and provide increased financial flexibility to the company as it continues to deliver profitable growth, Monitronics said.

The current lenders under the company’s 2019 takeback term loan facility, including funds managed by Monarch Alternative Capital LP and Invesco Senior Secured Management, Inc. as the largest lenders, will become the new principal equity owners of Monitronics, providing the company with additional support to execute on its business plan.

The company has already obtained the requisite support from its stakeholders to confirm the plan of reorganization and expects to achieve bankruptcy court approval of the plan and emerge from Chapter 11 within about 46 days of filing.

The DIP financing includes $90 million in new money to fund the process and provide cash to the balance sheet as well as $297 million to refinance the company’s existing super-priority revolving credit facility and term loan.

The financing will fund Monitronics’ operations during the Chapter 11 proceedings, including the payment of employee wages and benefits, suppliers, partners and vendors in the ordinary course of business.

The company will emerge with about $600 million in exit financing.

Under the plan, other secured claims, 2019 exit facility claims, general unsecured claims, intercompany claims and affiliate equity interests in any Monitronics subsidiary are unimpaired and not entitled to vote.

The 2019 takeback term loan claims and Monitronics equity interests are impaired and may vote on the plan.

This is the group’s second round in Chapter 11. It filed its first case on June 30, 2019 in the Southern District of Texas and received confirmation of a plan of reorganization on Aug. 7, 2019. The plan went effective on Aug. 30, 2019.

The home security and alarm monitoring services provider is based in Dallas. The Chapter 11 case number is 23-90332.

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