Boomerang Tube disclosure statement approved; plan hearing Sept. 21

By Caroline Salls

Pittsburgh, Aug. 14 – Boomerang Tube, LLC obtained court approval of the disclosure statement for its plan of reorganization, according to an order filed Friday with the U.S. Bankruptcy Court for the District of Delaware.

The plan confirmation hearing is scheduled for Sept. 21.

As previously reported, the company, its term loan lenders, some bridge facility lenders, its ABL facility lenders and majority interest holder Access Tubulars, LLC entered into a plan support agreement.

Under that agreement, Boomerang’s funded debt will be reduced by converting $214 million in outstanding principal of term loan facility obligations into 100% of the new common stock in a new holding company.

The agreement also calls for payment of a backstop exit fee and exit closing fee equal to 20% of equity of the new holding company common stock and the issuances of equity under a management incentive plan not to exceed 5% of the total outstanding equity of the new holding company.

In addition, the reorganized company will issue $55 million of subordinated notes secured by a third-priority lien on ABL collateral and term collateral.

Treatment of creditors under the proposed plan will include:

• Holders of ABL facility claims and debtor-in-possession ABL facility claims will either receive a share of interests in an ABL exit facility if the ABL exit lenders are the same as the ABL DIP lenders, or be paid in full in cash;

• Holders of DIP term facility claims will be paid in full in cash;

• Holders of term loan facility claims will receive a share of 100% of common stock in a new holding company, subject to dilution, 100% of the subordinated notes and payment in full in cash of outstanding professional fees and expenses;

• Holders of SBI secured claims will receive a promissory note issued by a new operating company, which will have an original principal amount of the holder’s share of $4 million and an interest rate of 4% and will mature on the seventh anniversary of the plan effective date;

• Holders of general unsecured claims will receive a share of general unsecured creditors trust proceeds;

• Intercompany claims and intercompany interests will be left unaltered, except for those canceled as mutually agreed to by the holder and the company; and

• All existing equity securities issued by Boomerang will be canceled, and holders will receive no distribution.

Boomerang Tube is a St. Louis-based producer of oil country tubular goods and line pipe that filed for bankruptcy on June 9. The Chapter 11 case number is 15-11247.

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