Blue Bird pre-packaged plan of reorganization takes effect

By Caroline Salls

Pittsburgh, Jan. 31 - Blue Bird Corp.'s pre-packaged plan of reorganization took effect Monday, less than a week after the company made a pre-packaged Chapter 11 filing, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Nevada.

The company filed for Chapter 11 bankruptcy on Jan. 24, and its plan of reorganization was confirmed Friday.

According to a Monday news release, the plan includes a debt-for-equity conversion plan that is expected to dramatically strengthen the company's balance sheet and provides for a full cash recovery to general unsecured creditors.

Treatment of creditors will include:

• Holders of bank group claims will receive their share of the company's new converted term loan and its share of the new stock distribution of parent Peach County Holdings, Inc.;

• Holders of other secured claims will recover 100% in the lien and collateral securing their claim;

• Holders of general unsecured claims will receive 100% recovery in cash;

• Holders of interests will recover 100% and the interests will be canceled.

Blue Bird's lenders have also agreed to increase the company's borrowing availability by $52.5 million through a new and expanded loan agreement.

Blue Bird is a Fort Valley, Ga., school bus manufacturer. Its Chapter 11 case number is 06-50026.

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