Output Services Group’s plan accepted by first-lien claimholders

By Sarah Lizee

Olympia, Wash., Nov. 20 – Output Services Group, Inc. reported the voting results for its Chapter 11 pre-packaged Chapter 11 plan of reorganization in a tabulation summary filed Saturday with the U.S. Bankruptcy Court for the Southern District of Texas.

The company said 107 holders of existing first-lien claims totaling $550.96 million submitted acceptable votes, all of which were in favor of the plan.

The confirmation hearing is scheduled for Nov. 21.

The plan reflects the company’s 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 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.

Output Services is a provider of billing and payment solutions based in Carol Stream, Ill. The company filed bankruptcy on Oct. 15 under Chapter 11 case number 23-90799.

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