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Silicon Graphics receives court approval of backstop commitment plan with reorganization rights offering
By Jennifer Lanning Drey
Eugene, Ore., Aug. 23 - Silicon Graphics Inc. obtained court approval to enter into backstop commitment agreements for the rights offering proposed under its plan of reorganization, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.
Under the plan, reorganized Silicon Graphics will distribute shares of new common stock to the holders of secured note claims and Cray unsecured debenture claims in partial satisfaction of their claims.
Some of the new common stock will be issued under a rights offering.
As previously reported, secured noteholders will receive subscription rights entitling them to purchase their share of 6.8 million shares of the new common stock, and Cray unsecured debenture holders will receive subscription rights to purchase their share of 700,000 shares of the new common stock.
The price for each share is $6.67.
Under the terms of a global settlement, the plan allows Lampe Conway to purchase any amount of new common stock not purchased under the Cray debenture rights offering.
In addition, QDRF Master Ltd.; Encore Fund, LP; Quadrangle Debt Recovery Income Fund Master, Ltd.; Quadrangle Debt Opportunities Fund Master Ltd.; and the Watershed entities can purchase any amount of new common stock not purchased under the rights offering at the rights offering price.
In exchange for their agreement to backstop the rights offering, the backstop purchasers collectively will receive a total $1 million backstop fee, as well as subscription rights to purchase an additional 1.13 million total shares of new common stock.
Silicon Graphics, a Mountain View, Calif., technology provider, filed for bankruptcy on May 29. The company's Chapter 11 case number is 06-10977.
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