JHT files plan of reorganization; pre-bankruptcy lenders to receive loan proceeds, new stock

By Caroline Salls

Pittsburgh, July 1 - JHT Holdings, Inc. filed its plan of reorganization and related disclosure statement Monday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, a majority of JHT lenders have agreed to convert a portion of their debt to equity and become the owners of the reorganized JHT.

Under the proposed plan, the company's outstanding bank debt will be reduced by more than 40%, and annual cash interest expense will decrease by more than 50%.

According to the disclosure statement, the plan calls for an exchange of the pre-bankruptcy lenders' secured claims for a $60 million exit second-lien loan and 70% of the new stock of the reorganized company.

Intercompany interests will be reinstated and all other equity interests will be cancelled.

Treatment of creditors will include:

• Holders of administrative claims, priority tax claims, other priority claims, debtor-in-possession facility claims and pre-bankruptcy advance claims will recover 100% in cash;

• Holders of pre-bankruptcy facilities claims will receive a share of a $60 million exit second-lien term loan, plus 70% of the new common stock of the reorganized company and a $65 million unsecured deficiency claim;

• Each lender under a revolving exit facility will receive its share of the remaining 30% of new common stock in the reorganized company;

• Holders of other secured claims will recover 100% through return of the collateral securing the claim, curing of the claim or reinstatement of the claim;

• Holders of general unsecured claims and equity interests will receive no distribution under the plan; and

• Intercompany claims and intercompany interests will be reinstated.

JHT said it will obtain a revolving exit facility from Highland, Spectrum and DB Zwirn.

This exit facility will be comprised of a $35 million revolving credit facility, including a $10 million sublimit for letters of credit, plus an additional pay-in-kind amount to be added during the period from the initial revolver borrowing through the maturity date.

Interest will be Libor plus 600 basis points, subject to a 350 bps floor.

The facility will mature three years from the plan effective date.

Meanwhile, the company's pre-bankruptcy lenders have agreed to exchange their facilities claims for a $60 million second-lien exit term loan facility, which will bear interest at Libor plus 650 bps, with a 350 bps floor.

The second-lien loan will mature five years from the plan effective date.

A hearing on approval of the disclosure statement is scheduled for Aug. 6.

JHT, a Kenosha, Wis., truck and automobile transportation company, filed for bankruptcy on June 24. Its Chapter 11 case number is 08-11267.

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