Optima Specialty Steel third amended plan of reorganization confirmed

By Caroline Salls

Pittsburgh, Oct. 16 – Optima Specialty Steel, Inc.’s third amended plan of reorganization was confirmed Monday by the U.S. Bankruptcy Court for the District of Delaware.

Last month, the company made modifications to its plan to incorporate a transaction under which DDJ Capital Management, LLC will serve as plan sponsor.

The company said the modified plan continues to provide for a comprehensive reorganization through a debt-for-equity swap of unsecured notes claims, all of which are held by accounts and investment funds managed by DDJ.

Under the plan, Optima’s debtor-in-possession facility will be paid in full from the proceeds of an up to $240 million exit term loan facility backstopped by DDJ on behalf of some of its managed accounts and investment funds.

In addition, unsecured notes claims will be converted into 100% of the new common stock in reorganized Optima.

General unsecured claims that are due and payable as of the plan effective date will be paid in full in cash, without post-bankruptcy interest.

Existing Optima equity interests will be extinguished and holder Optima Acquisition will not receive any distribution under the modified plan.

Also, the modified plan retains causes of action against Optima Acquisition related to the termination of the support agreement and good faith deposits.

Optima is a Miami-based specialty steel manufacturer. The company filed bankruptcy on Dec. 15, 2016 under Chapter 11 case number 16-12789.

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