Silicon Graphics' disclosure statement approved; plan confirmation hearing Sept. 19

By Caroline Salls

Pittsburgh, July 27 - Silicon Graphics Inc.'s disclosure statement for its first amended joint plan of reorganization was approved Thursday by the U.S. Bankruptcy Court for the Southern District of New York.

The plan confirmation hearing will be held Sept. 19.

The first amended plan reflects the global settlement with the company's debtor-in-possession lenders and noteholders.

Parties to the agreement include the official committee of unsecured creditors, debtor-in-possession lenders Quadrangle Master Funding Ltd., Watershed Technology Holdings, LLC and Encore Fund, LP; the company's senior secured convertible noteholders; and Conway & Co., LLC.

Under the settlement agreement, the convertible noteholders and Conway agree to vote to support the plan, and Conway will withdraw its objection to the DIP facility.

In addition, the plan of reorganization cannot be changed without the permission of the creditors committee and Conway, except in the case of permitted transactions, including asset or stock sales or obtaining commitment for a $100 million exit facility.

The senior note lenders will commit to buy any shares of new common stock not purchased under a rights offering in exchange for a $1 million commitment fee.

Treatment of creditors under the settlement agreement plan terms will include:

• Holders of the company's 6½% secured notes and 11¾% secured notes will receive their share of 2.5 million shares of new common stock in the reorganized company as well as 6.8 million rights to purchase one share of additional stock. This will represent 100% of the new common stock in the reorganized company.

The noteholders will also receive 100% of the beneficial interests of a trust funded by price-fixing litigation proceeds and $250,000 in cash contributed by the company;

• Holders of general unsecured claims will receive their share of $9 million;

• Holders of Cray unsecured debentures will receive 700,000 rights for new common stock and their share of $1.2 million. Conway will have the right to purchase the rights not purchased by Cray debenture holders; and

• Holders of old Silicon Graphics equity interests will receive no distribution.

Post-bankruptcy financing claims, priority tax claims, secured tax claims and other priority claims will be paid in full.

As previously reported, the company plans to emerge from bankruptcy in September.

Silicon Graphics, a Mountain View, Calif., technology provider, filed for bankruptcy on May 29. The company's Chapter 11 case number is 06-10977.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.