BP Clothing files reorganization plan; lenders to create new company

By Caroline Salls

Pittsburgh, Feb. 29 - BP Clothing LLC filed a plan of reorganization and related disclosure statement Tuesday with the U.S. Bankruptcy Court for the Southern District of New York.

The company's senior lenders will form a limited liability company on the plan effective date and will own 100% of the reorganized company.

Holders of senior lender first-out obligations and senior lender second-out obligations will receive their consideration in the form of reorganized debtor common units, according to the disclosure statement.

Those units will be contributed to the new company in exchange for NewCo common units.

BP Clothing said it expects the plan to take effect in May.

Treatment of creditors will include the following:

• Holders of priority non-tax claims will be paid in full in cash;

• Holders of senior lender first-out obligation claims will receive 65% of the reorganized debtor common units.

However, Orpheus Holdings LLC agreed that a portion of the distribution to which it would otherwise be entitled on account of its class 3 senior lender second-out obligation claim in the amount of 21.5% of the common units will be distributed to the holders of senior lender first-out obligation claims, rather than Orpheus Holdings LLC and senior lender claimant MVC;

• Holders of senior lender second-out obligations will receive a share of 35% of the reorganized debtor common units;

• Holders of factor claims will be paid in cash under a factoring agreement or the agreement will be amended and restated; and

• Holders of subordinated lender claims, PIK lender claims, general unsecured claims and existing equity interests will receive no distribution.

BP Clothing is a New York-based women's apparel company that filed for bankruptcy on Dec. 12. Its Chapter 11 case number is 11-15696.

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