Carbo Ceramics’ second amended reorganization plan effective July 2

By Caroline Salls

Pittsburgh, July 6 – Carbo Ceramics Inc.’s second amended pre-packaged plan of reorganization took effect on Thursday, according to a notice filed Friday with the U.S. Bankruptcy Court for the Southern District of Texas.

The plan was confirmed on June 18.

As previously reported, Carbo Ceramics filed bankruptcy to facilitate an agreement reached with Wilks Brothers, LLC and Equify Financial, LLC (collectively, the Wilks Brothers) under which the Wilks Brothers will acquire Carbo through a debt-for-equity exchange.

Under the restructuring support agreement reached with the Wilks Brothers, Carbo’s pre-bankruptcy secured lenders agreed under a pre-negotiated plan to convert their secured claims, and Wilks agreed to potentially convert its DIP financing claims, if not rolled into an exit facility, into 100% of the equity in the reorganized debtors.

In addition, the pre-bankruptcy secured lenders agreed to provide Carbo’s unsecured creditors with cash equal to the greater of $500,000 or not less than the amount the unsecured creditors would receive in a hypothetical Chapter 7 liquidation, as well as to pay in full all unsecured creditors of Asset Guard and StrataGen, up to a total amount of $1.5 million.

The secured lenders will contribute $100,000 to fund the administrative costs of a liquidating trust established for the benefit of general unsecured creditors, which will own all avoidance actions not released in the plan.

Carbo, based in Houston, is a global technology company that provides products and services to the oil and gas, industrial, agricultural and environmental markets. The company filed bankruptcy on March 29 under Chapter 11 case number 20-31973.

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