Point Blank amended plan swaps direct subscription for rights offering

By Caroline Salls

Pittsburgh, April 8 - Point Blank Solutions, Inc. filed an amended plan of reorganization and related disclosure statement on April 8 to replace a previous rights offering with a $15 million to $25 million direct subscription of new common stock by PB Funding LLC, Privet Opportunity Fund I, LLC and Prescott Group Capital Management, LLC, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

According to the amended disclosure statement, the direct subscription, combined with the company's available cash from operations and any exit financing, will provide the funding necessary for plan effectiveness and for paying remaining secured and unsecured creditors.

Point Blank said part of the $25 million maximum subscription amount could come in the form of purchaser loans.

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

• Holders of priority claims, debtor-in-possession financing claims and miscellaneous secured claims will be paid in full;

• Holders of general unsecured claims will receive a share of distributions from a recovery trust. Previously, these creditors were slated to receive rights to participate in the rights offering, but that option has been eliminated under the amended plan;

• Holders of subordinated unsecured claims will receive a share of any recovery trust distributions remaining after payment in full with interest of general unsecured claims;

• Holders of class action claims and old equity interests will receive an equal share of recovery trust distributions. Under the previous plan, the equity holders would have also been eligible to participate in the rights offering; and

• Holders of other subordinated claims and unexercised options will receive no distribution.

The disclosure statement hearing is scheduled for April 21.

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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.