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Orchard Brands receives Court Approval of First Day Motions
21
Jan '11
Appleseed's Intermediate Holdings LLC and each of its domestic subsidiaries, which do business in the United States as “Orchard Brands”, announced that it received approval from the U.S. Bankruptcy Court for the District of Delaware for the Company's “first day” motions that will enable the Company's operations to proceed smoothly and without interruption throughout its reorganization case.

Among the first day motions granted, Orchard Brands received interim approval to access the Company's $140 million debtor-in-possession financing provided by its current lenders and to use its cash resources. The Company also received approval to continue to pay employees' salaries, wages, and benefits in the ordinary course, and the Court confirmed the Company's ability to pay vendors for post-petition goods and services. In addition, the Company received approval to allow all customer programs to continue uninterrupted.

Neale Attenborough, Orchard Brands' Chief Executive Officer, said: “We are pleased that the Court has promptly granted these motions, which ensures the Company will be able to continue to operate business as usual, and emerge from this process as quickly as possible with a capital structure that will firmly position us for long-term success.”

As previously announced, the Company initiated voluntary chapter 11 reorganization proceedings on January 19, 2011 after reaching agreement with over 80% of its first lien secured lenders and 100% of its second lien secured lenders on the terms of a pre-arranged plan of reorganization that will eliminate approximately $420 million of indebtedness and improve the Company's operating flexibility.

Certain of the Company's secured lenders have also agreed to invest $40 million of new capital through the chapter 11 plan. The Company intends to move forward with the restructuring on an expeditious basis and complete the restructuring process in approximately three to four months. The Company also secured a commitment from its current lenders to provide up to $120 million in exit financing to consummate its chapter 11 plan.

The Company is being advised by Kirkland & Ellis LLP, its legal counsel, and Alvarez & Marsal and Moelis & Company, its financial advisors.

The Company's ABL lenders are being advised by Winston & Strawn LLP, as legal counsel, and FTI Consulting, as financial advisor. The Company's first lien lenders are being advised by Sidley Austin LLP, as legal counsel, and Loughlin Meghji + Company, as financial advisor. The Company's second lien lenders are being advised by Kramer, Levin, Naftalis, & Frankel LLP, as legal counsel, and Miller Buckfire & Co., as financial advisor.

Orchard Brands


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