Output Services Group’s pre-packaged plan effective as of Nov. 30

By Sarah Lizee

Olympia, Wash., Nov. 30 – Output Services Group, Inc.’s pre-packaged Chapter 11 plan of reorganization went into effect on Thursday, according to a notice filed with the U.S. Bankruptcy Court for the Southern District of Texas.

The plan was confirmed on Nov. 21, as previously reported.

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, lower annual cash interest expense by 65%, provide exit financing and allow for the exit of the U.K. business.

The exit financing includes $50 million in first-lien term loans due May 30, 2028, $135 million in last-out term loans due Nov. 30, 2028 and $50 million in revolving credit facility commitments due May 30, 2028.

Interest is SOFR plus 800 basis points for first-out loans, SOFR plus 625 bps for last-out loans and SOFR plus 475 bps for revolving loans.

Acquiom Agency Services LLC and Seaport Loan Products LLC are co-administrative agents on the exit financing.

Upon emergence, Pemberton remains the largest equity holder along with new ownership.

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 last-out 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 £3.05 million.

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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