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Point Blank Solutions eyes approval of backstop offer by DIP lenders
By Lisa Kerner
Charlotte, N.C., Feb. 1 - Point Blank Solutions, Inc. asked the court to OK its entry into a subscription and backstop purchase agreement with its debtor-in-possession loan lenders Prescott Group Capital Management LLC, Privet Opportunity Fund I LLC and Lonestar Capital Management, LLC, as manager to PB Funding, LLC, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.
A hearing is requested for Feb. 14.
Under Point Blank's reorganization plan, the company will conduct a rights offering to purchase 100% of the equity interests in the reorganized company, to be backstopped by Prescott, Privet and Lonestar.
The backstop purchasers may increase the rights offering up to a maximum of $14,427,500, together with a proportionate increase in the direct issuance to Privet and Prescott of up to a maximum of $10,572,500, for a total of up to $25 million of new common stock, the filing said.
PB Funding is expected to purchase the unsubscribed portion, if any, of new common stock offered to eligible creditors in class 4. Privet and Prescott will purchase the unsubscribed portion, if any, of new common stock offered to eligible equity holders in class 7, according to the filing.
The debtors would pay the backstop purchasers a fee in an amount equal to 4% of the amount of the equity rights offering to the equity offering backstop purchasers and 4% of the amount of the creditor rights offering to PB Funding.
Point Blank, a Pompano Beach, Fla., producer of body armor systems for law enforcement and the military, filed for bankruptcy on April 14, 2010. Its Chapter 11 case number is 10-11255.
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