Xinergy Chapter 11 plan gives new stock to senior secured noteholders

By Caroline Salls

Pittsburgh, Sept. 17 – Xinergy Ltd. filed its plan of reorganization and related disclosure statement on Sept. 16 with the U.S. Bankruptcy Court for the Western District of Virginia.

On the plan effective date, the reorganized holding company (New Holdco) will cancel all existing equity securities in Xinergy Ltd.

New common stock will be issued under the plan.

The company said it expects to need exit financing, with the terms to be determined. Xinergy said the exit financing may involve the conversion of its debtor-in-possession facility or an alternative exit financing arrangement.

Treatment of creditors will include the following:

• Administrative claims, priority tax claims and priority non-tax claims will be paid in full in cash;

• Other secured claims will be paid in full in cash or holders will receive the collateral securing the claim;

• Holders of senior secured note claims will receive 100% of the new common stock in the reorganized company;

• The treatment of holders of general unsecured claims is to be determined.

The company said in the disclosure statement that holders of general unsecured claims are not entitled to any distribution under the priority scheme of the Bankruptcy Code because Xinergy does not have assets of sufficient value to pay in full the claims of senior classes, and are there no unencumbered assets. However, since the treatment of these claims is to be determined, the entitlement of the class to vote is reserved;

• Intercompany claims and intercompany interests will be unaltered or reinstated; and

• Xinergy common stock and section 510(b) claims will be cancelled.

The disclosure statement hearing is scheduled for Oct. 16.

Xinergy, a Knoxville, Tenn.-based coal producer, filed for bankruptcy on April 6. Its Chapter 11 case number is 15-70444.

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