American Tire Distributors, Inc.’s plan for Chapter 11 reorganization will go before the court for approval on Wednesday and has already gained near-unanimous acceptance by voting stakeholders, the company said.
The plan received approval from each class of creditors and holders of interests entitled to vote including 100% of voting term loan lenders, 98% of voting bondholders and 100% of voting shareholders, ATD said in a press release Monday night.
“The voting results we are announcing today reflect the strong confidence that our financial stakeholders have in ATD’s business and the actions we are taking to lead our industry forward,” said Stuart Schuette, CEO of ATD. “The support of our financial stakeholders has enabled us to move through this process on an expedited basis. We are now entering the final phase of this process and are poised to move forward as a stronger company that is even better positioned to help our customers continue thriving and driving into the future.”
The company’s recapitalization will reduce its debt by more than $1.1 billion and provide the company with new exit financing to support its ongoing operations, ATD said. A confirmation hearing on the plan is scheduled for Wednesday morning.
Pursuant to the terms of the agreement, which is subject to court approval:
- Bondholders will receive 95% of new equity in the recapitalized company and existing equity holders will receive 5% of the new equity.
- The company intends to pay continuing manufacturer partners and vendors in full for existing claims.
The company has also secured $1.2 billion in financing to ensure adequate liquidity as it looks to emerge from Chapter 1 bankruptcy, according to its reorganization plan filed with the courts in mid-November.
Kirkland & Ellis LLP is serving as legal counsel to ATD, AlixPartners LLP is serving as an operational advisor and Moelis & Company LLC is serving as financial advisor.
Additional information is available on ATD’s restructuring website at www.ATDrecapitalization.com or by calling ATD’s restructuring hotline, toll-free in the U.S., at 866-967-0495. For calls originating outside of the U.S., dial +1-310-751-2695. Questions can also be submitted by email to [email protected].
Court filings and other documents related to the court-supervised proceedings are available on a separate website administered by ATD’s claims agent, KCC, at www.kccllc.net/ATD.
For more on ATD’s Chapter 11 case, check out these stories:
ATD Files for Chapter 11 Bankruptcy Upon Agreement with Bondholders
ATD Names ‘Critical Vendors’ in Chapter 11 Filing
Column: What ATD Filing for Bankruptcy Really Means
ATD: Reorganization Will ‘Help Our Customers Succeed’
ATD Begins Laying Off Employees, Downsizing
ATD and the Impact of the TireHub Deal
