CINCINNATI -- Pierre Foods Inc. has filed a consensual joint plan of reorganization and disclosure statement with the U.S. Bankruptcy Court for the District of Delaware. The plan is supported by funds managed by Oaktree Capital Management LP, the company's single largest creditor, and Pierre's official Committee of Unsecured Creditors.
Pierre will ask the court to confirm the plan in early December and hopes to emerge from bankruptcy shortly thereafter. Oaktree supplied the company's debtor-in-possession (DIP) credit facility, and upon confirmation of the plan, funds managed by Oaktree [image-nocss] will become the majority owner of Pierre.
"The filing of this consensual plan represents a significant step forward in our efforts to emerge from Chapter 11 as a stronger company that can operate profitably in this difficult economic environment and beyond," said Norbert Woodhams, CEO of Pierre Foods. "We are very pleased to have Oaktree as our new financial sponsor and believe that Oaktree's continuing commitment to Pierre demonstrates its deep belief in the fundamental strengths and the inherent value of our company."
He added, "Thanks to the loyalty of Pierre's dedicated employees, customers and vendors, we have made great progress in our efforts to restructure the company and are poised to conclude our restructuring more quickly than originally projected. We have realigned our capital structure by eliminating over $225 million of debt and our business continues to perform in line with our expectations. We look forward to concluding this process and emerging from Chapter 11 as expeditiously as possible."
The plan provides for the following:
Conversion of $100 million of existing prepetition secured indebtedness to 100% of the equity of Reorganized Pierre. Conversion of $50 million of existing prepetition secured indebtedness to a new mezzanine facility. The amendment and restatement of the remaining prepetition secured indebtedness of approximately $97 million on terms much more favorable to the company. A new exit facility to fund the company's ongoing operations and pay obligations under the plan. The debtors' senior subordinated notes in the principal amount of $125 million will be cancelled. 12% cash recovery for unsecured creditors (including holders of senior subordinated notes) to be paid in installments within 120 days after the effective date as more fully set forth in the plan.The disclosure statement contains a historical profile of the company, a description of proposed distributions to creditors, as well as many of the technical matters required for the solicitation process, such as descriptions of who will be eligible to vote on the plan and the voting process itself.
Click hereto view Pierre's plan and disclosure statement.
Cincinnati-based Pierre Foods is a leading manufacturer, marketer and distributor of foodservice solutions, focusing on pre-cooked and ready-to-cook protein products, compartmentalized meals and hand-held convenience sandwiches.
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