BI-LO files amended plan to tweak creditor treatment, add class

By Caroline Salls

Pittsburgh, March 15 - BI-LO LLC filed an amended plan of reorganization and related disclosure statement Monday with the U.S. Bankruptcy Court for the District of South Carolina to change the distribution for holders of debtor-in-possession facility claims, general unsecured claims and convenience claims and to add a Bruno's/pension plan class.

As previously reported, BI-LO's plan is sponsored by Lone Star Funds and includes a $350 million cash infusion, funded by a $150 million new equity investment by Lone Star and $200 million in committed term loan financing.

In addition, the Lone Star proposal will provide for a $150 million ABL facility for BI-LO post-emergence to fund working capital and other normal business needs.

Treatment of creditors under the amended plan will include:

• Holders of administrative claims and priority claims will recover 100% in cash;

• Holders of debtor-in-possession facility claims will be paid in full in cash and all letters of credit issued under the DIP loan will either be returned to the issuer undrawn and cancelled or collateralized either in cash or a back-to-back letter of credit in an amount equal to 100% of the face amount, decreased from 105% under the previous plan;

• Holders of secured claims will either have their claims reinstated or receive other treatment agreed to after the plan effective date;

• Holders of term lender claims will receive a share of $260 million in cash and will retain all adequate protection payments made by the company before the equipment date, as well as equipment sale proceeds;

• Holders of general unsecured claims will receive a share of trust assets, including $40 million in cash, increased from $30 million under the previous plan;

• Holders of Bruno's/pension fund claims will receive cash payments from the plan investor equal to the percentage paid to holders of general unsecured claims. Lone Star Fund V (U.S.) LP has agreed to guarantee the payments to the Bruno's/pension fund creditors.

This class is new to the amended plan;

• Holders of convenience claims will recover 60% in cash from trust assets, decreased from a scheduled 95% in cash out of an unsecured creditors' fund under the original plan; and

• Holders of equity interests will receive no distribution.

BI-LO, a Greenville, S.C., supermarket operator, filed for bankruptcy on March 23, 2009. The Chapter 11 case number is 09-02140.

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