CBL & Associates files Chapter 11 plan and disclosure statement

By Sarah Lizee

Olympia, Wash., Dec. 30 – CBL & Associates Properties, Inc. filed a Chapter 11 plan and related disclosure statement on Tuesday in the U.S. Bankruptcy Court for the Southern District of Texas.

The company, Weil, Gotshal & Manges LLP and Moelis & Co. LLC engaged in extensive arms’ length, good faith negotiations with an ad hoc group of holders of roughly 66% of the company’s senior unsecured notes, which resulted in a restructuring support agreement dated Aug. 18.

The consenting noteholders agreed to support the plan, which provides for a comprehensive restructuring of the company’s balance sheet.

Under the plan, holders of bank lender secured claims will receive their pro rata share of the bank lender secured claim exit credit facility distribution.

The $950 million exit credit facility, which will replace the existing first-lien credit agreement, will mature in seven years. Interest will be no greater than Libor plus 300 basis points, with a 50 bps Libor floor, payable in cash quarterly.

Holders of consenting crossholder secured claims will receive their pro rata share of the consenting crossholder secured claims recovery pool, which is a combination of new preferred stock and cash.

Holders of bank lender deficiency claims will receive their pro rata share of the bank lender deficiency claim exit credit facility distribution and, in the event that the bankruptcy court determines that the holders of bank lender deficiency claims are entitled to an additional recovery to confirm the plan, their pro rata share of the bank lender deficiency claims equity distribution, subject to dilution.

Holders of consenting crossholder deficiency claims will receive their pro rata share of the consenting crossholder deficiency claims recovery pool, subject to dilution.

Except to the extent that holders of senior unsecured notes claims elect to receive cash in lieu of new common stock and new preferred stock, holders of senior unsecured notes claims will receive their pro rata share of the senior unsecured notes’ new preferred stock distribution, and the senior unsecured notes claim new common stock distribution, subject to dilution.

Holders of ongoing trade claims will receive payment in full in cash, payment in the ordinary course of business as if the Chapter 11 cases had never been commenced, or other treatment rendering their claims unimpaired.

Holders of general unsecured claims will receive an amount to be determined, subject to diligence regarding the general unsecured claims pool and executory contracts to be rejected.

If classes 12, 13 and 14 are each accepting classes:

• Each holder of an existing LP common unit either (a) will receive its pro rata share of the new LP units and the warrants, or (b) will be deemed to have converted or redeemed its existing LP common units in exchange for existing REIT common stock;

• Each holder of existing REIT preferred stock will receive its pro rata share of the new common stock and warrants, each subject to dilution;

• Each holder of existing REIT common stock will receive its pro rata share of the new common stock and the warrants, each subject to dilution.

The restructuring will reduce the company’s funded debt by about $1.54 billion, and annual interest expenses by around $108 million.

CBL is a Chattanooga, Tenn.-based owner and developer of malls and shopping centers. The company filed Chapter 11 bankruptcy on Nov. 1 under case number 20-35226.

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