Workflow Management files bankruptcy to address senior debt issues

By Caroline Salls

Pittsburgh, Oct. 1 - Workflow Management Inc. made a pre-packaged Chapter 11 bankruptcy filing Wednesday in the U.S. Bankruptcy Court for the Eastern District of Virginia.

According to a statement filed by chief financial officer, executive vice president and treasurer Paul H. Bogutsky, the company filed bankruptcy "for the narrow purpose of addressing certain senior debt issues."

"The debtors intend to use the Chapter 11 process solely to resolve certain balance sheet issues that they have not been able to resolve consensually with certain of their lenders and to complete the restructuring of their balance sheet promptly," Bogutsky said.

Plan terms

Treatment of creditors under the company's pre-packaged plan of reorganization will include:

• Holders of priority claims will be paid in full;

• Holders of first-lien lender claims and second-lien lender claims will retain their liens and receive deferred cash payments totaling at least the amount of the claim;

• Holders of other secured claims will, at the company's option, either be paid in full in cash on the plan effective date, receive deferred cash payments, be paid in the ordinary course or receive the collateral securing the claim;

• Holders of general unsecured claims will either be paid in the ordinary course of business or recover half of their claim in cash on the distribution date and half 60 days after the distribution date;

• Holders of lease rejection damages claims will either recover half of their claim in cash on the distribution date and half 60 days after the distribution date or receive 1/12th of their claim on the distribution date and 1/12th each month thereafter until repaid;

• Unsecured note claims will be reinstated;

• Holders of unsecured contingent claims will either recover half of their claim 30 days after the distribution date and half 60 days after the distribution date or have their claim reinstated;

• Intercompany claims, WF Capital equity interests and subsidiary equity interests will be reinstated; and

• Holders of convenience claims will be paid in full in cash.

The company said the cash for plan payments will come from the reorganized company's cash and any cash held in a contested claims reserve.

In connection with the bankruptcy filing, Workflow Management requested court approval to use the cash collateral of its pre-bankruptcy secured lenders through Jan. 31 to fund its operations while in bankruptcy.

Debt details

According to court documents, Workflow Management has $100 million to $500 million in both assets and debt.

The company's largest unsecured creditors include:

• Branch Banking and Trust Co. of Washington, D.C., with a $20 million note payable claim;

• Carlyle Group, based in Washington, D.C., with a $12.5 million note payable claim;

• Mohamed Yacoub of Montreal, with a $1.37 million litigation settlement claim; and

• United Envelope Long-Term Union Pension of Jersey City, with a $1.09 million pension obligations claim.

The company is represented by McGuire Woods LLP and Arnold & Porter LLP.

Workflow Management is a Dayton, Ohio-based provider of end-to-end business management outsourcing services to commercial customers. The Chapter 11 case number is 10-74617.

© 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.