Hollander Sleep Products secures confirmation of reorganization plan

By Caroline Salls

Pittsburgh, Sept. 5 – Hollander Sleep Products, LLC’s amended pre-packaged plan of reorganization was confirmed on Thursday by the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, the plan calls for the conversion of $166.5 million of current term debt into new equity in the reorganized company and $30 million of exit financing to provide funding for a full range of business and infrastructure improvements and investment in new manufacturing equipment to improve efficiencies and competitiveness, the company said.

Holders of other secured claims will receive payment in full in cash for their claims, collateral securing their claims or reinstatement of their claims.

Holders of secured tax claims will receive cash in full for the unpaid portion of their claims or equal semiannual cash payments continuing for five years from the petition date equal to their claim.

Holders of term loan claims will receive their pro rata share of the term loan if an entity other than the term loan lenders is the winning bidder. Otherwise, they will receive a pro rata share of 23% of new interests.

Holders of general unsecured claims will receive their share of excess distributable cash in full for their claims if the term loan lenders are not the winning bidder for the company’s assets. Otherwise, they will receive their share of a recovery amount to be agreed upon by the lenders.

Holders of intercompany claims and interests will have their claims reinstated or cancelled.

Holders of Dream II interests will be cancelled.

Holders of other priority claims will receive payment in full of the unpaid portion of their claim.

The Boca Raton, Fla.-based company designs, manufactures and markets utility bedding products. It filed for Chapter 11 bankruptcy on May 19. The case number is 19-11608.

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