Rotech amended plan adds loan participation, cuts shareholder payment

By Caroline Salls

Pittsburgh, June 3 - Rotech Healthcare Inc. filed an amended plan of reorganization on May 31 with the U.S. Bankruptcy Court for the District of Delaware that gives holders of second-lien notes claims the right to participate in a new second-lien term loan and eliminates the proposed distribution for Rotech debtor shareholders.

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

• Holders of first-lien claims will receive cash equal to their claims;

• Holders of second-lien notes claims will receive 100% of the reorganized company's common stock and the right to participate in the new second-lien term loan.

The amount of each holder's participation will be equal to its share of the second-lien notes claims multiplied by $150 million, and each holder will be required to fund its participation in cash on the plan effective date;

• Holders of general unsecured claims will receive a share of $1.5 million, provided, however, that they will receive no distribution if they vote to reject the plan;

• Guarantor debtor equity interests will be reinstated; and

• Holders of Rotech equity interests will receive no distribution.

Plan comparison

In comparison, treatment of creditors under the original plan would have included the following:

• The holders of Rotech's first-lien term loan and its 10¾% first-lien secured notes would have received their share of an amended and restated term loan;

• The 10½% second-lien secured notes would have been converted into 100% of the common equity of the reorganized company;

• Holders of general unsecured claims would have been paid in full in cash if the amount of their claims did not exceed $2.5 million or would have received a share of $2.5 million if the claims did exceed that amount;

• Guarantor debtor shares would have been reinstated; and

• Rotech shareholders would have received a distribution of $0.10 per share, provided that the total amount paid on account of the interests did not exceed $2.62 million.

Rotech, an Orlando, Fla.-based provider of home medical equipment and related products and services, filed for bankruptcy on April 8. Its Chapter 11 case number is 13-10741.

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