Fibermark files revised plan of reorganization reflecting settlement
27 Sep '05
3 min read
Leading fiber-based material producer FiberMark Inc announced that it has filed a revised Plan of Reorganization reflecting the settlement reached among FiberMark and its top three bondholders—AIG Global Investment Corp, Post Advisory Group, LLC and Silver Point Capital L.P. The agreement was reached in response to the findings and recommendations of the independent examiner. Key provisions of the revised Plan include the following:
To settle potential causes of action by unsecured creditors against AIG and Post and litigation rights held by FiberMark against AIG and Post, bondholders and all other unsecured creditors excluding the top three bondholders—will receive an all-cash payment estimated to provide a 70 percent recovery of claim amounts, which was the estimated recovery under FiberMark's initial plan of reorganization and compares favorably with the 54 percent estimated recovery levels under the plan filed in August.
Alternatively, unsecured creditors interested in receiving an equity position in the reorganized company may elect a distribution that includes new common stock along with a partial cash payment, which would provide an estimated 62 percent recovery of claim amounts. Under both options, the recovery estimates assume that the current value of the allowed claims remains unchanged.
AIG and Post will contribute to the funding of the cash payments 8 percent of unsecured claims, not to exceed $4.2 million. For unsecured creditors receiving the all-cash payment, a portion of the cash will be provided by Silver Point, which will effectively purchase the stock otherwise allocable to those creditors.
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