Altegrity’s altered restructuring plan disclosure approved by court

By Kali Hays

New York, May 15 – Altegrity, Inc. received approval of the disclosure statement related to its amended plan of reorganization on Friday from the U.S. Bankruptcy Court for the District of Delaware, according to an order.

A hearing on confirmation of the plan is set for July 1.

As previously reported, the company revised the plan after reaching an agreement with its official committee of unsecured creditors on unsecured creditor treatment.

Altegrity had already reached a restructuring support agreement with a majority of its key stakeholders that calls for a consensual restructuring plan that will delever the company by about $700 million, or 40%, of its outstanding debt.

To demonstrate their support of the restructuring plan, holders of 78% of Altegrity’s first-lien debt and 95% of its second-lien and third-lien debt have executed the restructuring support agreement.

The company said the transactions proposed by the support agreement address some existing defaults under the first-lien debt, modify change-of-control covenants and reset financial covenants to levels that are consistent with Altegrity’s revised business plan.

The transactions will reduce outstanding debt by 40% and provide the company with a new-money junior lien investment of $90 million to fund its Chapter 11 cases and post-emergence ongoing business operations.

Creditor treatment

Treatment of creditors under the amended plan will include the following:

• All first-lien credit facility and first-lien notes claims will be reinstated;

• Holders of operating debtors’ lien claims will either be paid in full in cash or retain the lien and be reinstated;

• Holders of second-lien notes will receive their share of 96.91% of the new common stock of reorganized Altegrity;

• Holders of third-lien notes will receive their share of 1.98% of the new common stock;

• Holders of operating debtor unsecured notes claims will receive a share of the operating debtors’ notes claims new common stock pool, equaling 1.1% of the new common stock issued as of the plan effective date;

• Holders of operating debtors’ general unsecured claims will receive a share of $1.25 million in cash;

• Altegrity, Inc. junior subordinated notes claims and interests in Altegrity Holding Corp. will be canceled;

• Interests in subsidiary operating debtors will be reinstated, cancelled or transferred;

• Liquidating debtors’ first-lien credit agreement claims and first-lien notes claims will be reinstated;

• Holders of liquidating debtors lien claims will either be paid in cash equal to the value of the collateral securing the claims or receive that collateral;

• Holders of liquidating debtors second-lien notes claims, third-lien notes claims and unsecured claims will receive a share of any asset proceeds not subject to a security interest at the time of disposition; and

• Liquidating debtor interests will be reinstated, transferred or canceled.

Altegrity is a Falls Church, Va.-based provider of employment background screening and eligibility solutions and provider of risk and information management services and solutions. The company filed for bankruptcy on Feb. 8 under Chapter 11 case number 15-10226.

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