Global Power granted court OK for disclosure statement; confirmation hearing Dec. 20

By Jennifer Lanning Drey

Portland, Ore., Oct. 31 - Global Power Equipment Group Inc. obtained court approval for the disclosure statement for its plan of reorganization from the U.S. Bankruptcy Court for the District of Delaware, according to a company news release.

The plan confirmation hearing is scheduled for Dec. 20, and the company said it could emerge from bankruptcy as early as year-end.

"With the disclosure statement approved and a confirmation hearing scheduled, we now have a clear timeline for a successful emergence from Chapter 11," John Matheson, president and chief executive officer of Global Power, said in the release.

"The company will emerge from Chapter 11 with a strong balance sheet and capital structure that will ensure continued excellent service and support for our customers."

Global Power also gained court approval for the plan support agreement and backstop agreement related to its plan of reorganization, according to a Wednesday filing with the court.

The plan is supported by the company's official committees of unsecured creditors and equity holders and an informal committee of Global Power noteholders, which hold roughly 94% of the company's senior subordinated notes.

As previously reported, the plan will be funded by a $90 million equity holders' rights offering available to all existing equity holders, and the rights offering will be backstopped by a group of existing equity holders.

All of the new common stock in the reorganized company will be distributed to existing equity holders on account of their existing equity interests and subscription to the rights offering.

"Since entering into the plan settlement outline in August with the committees and the noteholders, the company and representatives of the major constituencies in these cases have worked hard to finalize the various components of the plan, which the company believes maximizes the recovery of all stakeholders," Matheson said in the release.

The plan also includes a cash settlement with holders of 94% of the company's senior subordinated notes that satisfies all claims against the company's Deltak subsidiary through the establishment of a trust and a $34 million cash reserve.

Global Power expects to emerge from Chapter 11 as a private company, according to its disclosure motion.

Creditor treatment

Treatment of creditors under the plan will include:

• Holders of priority claims will receive full payment in cash;

• Holders of secured claims will either receive full payment on the plan effective date; full payment in installments, with claimants retaining their liens until they are paid in full; or proceeds from the sale of the collateral securing the claim;

• Holders of unsecured claims will receive full payment in cash, plus interest accrued from the bankruptcy filing date through the plan effective date;

• Holders of subordinated note claims will receive a share of cash from the noteholder settlement;

• Holders of WARN Act individual claims will receive a share of cash from a WARN Act individual settlement;

• Holders of WARN Act putative claims will receive a share of cash from a WARN Act putative claim settlement;

• Holders of equity interests will receive one share of new common stock in the reorganized company for each share of existing stock, as well as rights to purchase additional new common stock; and

• Holders of equity interests in the subsidiary debtors will retain their interests.

Global Power, a Tulsa, Okla., maker of gas turbine power plants and power-related equipment for industrial operations, filed for bankruptcy on Sept. 28, 2006. The Chapter 11 case number is 06-11045.

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