RentPath receives court confirmation of amended Chapter 11 plan

By Sarah Lizee

Olympia, Wash., April 1 – RentPath Holdings, Inc. received confirmation of its amended Chapter 11 plan, according to an order filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the company had filed its original Chapter 11 plan on June 10, 2020, but the plan could not take effect until regulatory approvals of its sale transaction were obtained.

The debtors conducted a marketing process for their assets and designated stalking horse bidder CoStar Group, Inc. as winning bidder, and RentPath NewCo as back-up bidder.

Later, RentPath terminated the stalking horse agreement and executed a third-party asset purchase agreement with Redfin for a purchase price of $608 million.

If, however, the debtors are unable to complete the sale to Redfin, they may seek to sell the assets to RentPath NewCo under a credit bid.

Under the plan, if the assets are sold to RentPath NewCo, debtor-in-possession claims will be converted into a pro rata portion of an exit $159.63 million five-year term loan facility, consisting of $88.59 million of converted DIP term A loans, and $71.04 million of new money term B loans.

Interest will be Libor plus 150 basis points in cash, subject to a 1% Libor floor, plus, at the company’s election, either 6.5% PIK interest as long as no event of default has occurred, or 6% in cash.

If the assets are sold to Redfin, DIP claims will be paid in full in cash.

Professional fee claims and priority tax claims will be paid in full.

Priority non-tax claims will either be paid in full or will be reinstated.

Holders of other secured claims will receive payment in full in cash, have their claims reinstated or receive the collateral securing their claims.

If the assets are sold to RentPath NewCo, holders of first-lien claims will receive their pro rata share of 60% of the new equity interests, subject to dilution by equity issued under the management incentive plan, the exit participation consideration, and their pro rata share of the cash proceeds of any of the debtors’ assets that are not acquired and that constitute collateral securing the first-lien claims. The exit participation consideration means holders’ entitlement to participate in the exit facility and receive their pro rata share of 40% of the new equity interests.

If the assets are sold to Redfin, holders of first-lien claims will receive their pro rata share of the sale proceeds less the second-lien claims recovery cash pool and second-lien sale distribution recovery.

If holders of second-lien claims vote to accept the plan, and the assets are sold to Redfin, holders will receive their pro rata share of the second-lien claims recovery cash pool and the second-lien sale distribution recovery. If they vote to accept the plan and the assets are sold to RentPath NewCo, holders of second-lien claims will receive the exit participation consideration, or cash in an amount required to satisfy section 1123(a)(4) of the Bankruptcy Code.

If holders of first-lien claims vote to reject the plan and the assets are sold to Redfin, they will receive their pro rata share of the sale proceeds after first-lien claims are paid in full. If they vote to reject the plan and the assets are sold to RentPath NewCo, they will not receive any distribution.

If holders of general unsecured claims vote to accept the plan, holders will be paid in full or receive treatment rendering their claims unimpaired.

If holders of general unsecured claims vote to reject the plan and the assets are sold to Redfin, holders will receive their pro rata share of the sale proceeds after first-lien and second-lien claims are paid in full. If they vote to reject the plan and the assets are sold to RentPath NewCo, they will not receive any distribution.

Intercompany claims will be adjusted, continued, settled, reinstated, discharged or eliminated.

Section 510(b) claims will be extinguished and holders will not receive any distribution.

Intercompany interests will be canceled or reinstated.

Parent equity interests will be canceled with no distributions to holders.

RentPath is an Atlanta-based vertical search company for apartment and home renters. The company filed bankruptcy on Feb. 12, 2020 under Chapter 11 case number 20-10312.

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