Output Services plan, disclosure statement hearing set for Nov. 21

By Sarah Lizee

Olympia, Wash., Oct. 18 – Output Services Group, Inc. had the combined hearing on its Chapter 11 plan and disclosure statement scheduled for Nov. 21, according to an order filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Texas.

As a reminder, the company filed bankruptcy on Sunday to implement a pre-packaged plan of reorganization.

Output Services Group said it has reached an agreement with its first-lien lenders, mezzanine lenders and preferred and common equity holders to significantly reduce its debt and annual interest expenses.

The pre-packaged plan aims to reduce debt by about $550 million, or 73%, to $235 million and lower annual cash interest expense by 65%.

Additionally, the company has lined up a $50 million debtor-in-possession facility that will convert to a new loan at emergence. Acquiom Agency Services LLC and Seaport Loan Products LLC are co-administrative agents.

The company will have the option to incur additional financing up to six months after the effective date to fund their post-emergence business operations.

The plan leaves all known general unsecured trade and litigation creditors unimpaired.

Other secured claims and other priority claims will be paid in full.

Holders of existing first-lien claims are expected to receive a 30.1% recovery. Holders will receive their pro rata share of new takeback loans and exchange reorganized equity, and election rights to provide up to its rights offering share of new first-lien loan commitments in a total amount equal to $25 million.

Other general unsecured claimholders are set to receive a pro rata share of liquidating trust assets and £3 million. The estimated recovery for this class is unknown.

Intercompany claims and intercompany interests will be reinstated, distributed, contributed, set off, canceled or otherwise addressed.

Existing interests will be canceled with no distribution.

During the reorganization process, the company will continue normal business operations.

Output Services is a provider of billing and payment solutions based in Carol Stream, Ill. The Chapter 11 case number is 23-90799.

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