Red River Waste sale approved, disclosure statement hearing moved

By Sarah Lizee

Olympia, Wash., July 18 – Red River Waste Solutions, LP received court approval to sell its assets to stalking horse bidder Platform Waste Solutions, LLC for $12.6 million, according to a minute entry filed Friday with the U.S. Bankruptcy Court for the Northern District of Texas.

Also on Friday, the court moved the hearing on conditional approval of the disclosure statement for its Chapter 11 plan to July 28 from July 21.

The company said in its motion seeking the new hearing date that it needed more time to make some revisions to the sale order.

Plan terms

The company said funding for the plan will come from either holders of the debtor’s existing equity, as the plan sponsor, or the sale of all of the assets or reorganized debtor’s equity interests.

Red River said that in order to ensure any restructuring transaction contemplated by the plan maximizes value for all stakeholders, the plan includes a toggle feature whereby the plan sponsor will have an opportunity to provide a binding commitment to make an equity infusion to recapitalize the business and make necessary plan payments, while the debtor and its advisers simultaneously market the assets to effectuate a sale.

In exchange for the equity infusion, new interests will be issued to the plan sponsor on the effective date.

In parallel with approval of the concomitant disclosure statement, the debtor will seek approval of bid procedures for the assets. The plan sponsor will have the opportunity to make or raise the equity infusion until 10 days prior to the auction.

If the plan sponsor produces a binding commitment for financing equal to or greater than what is needed to fund the plan, the sale process will be terminated.

Under the plan, all administrative claims, priority tax claims and other priority claims will be paid in full in cash.

Holders of DIP financing claims will receive cash equal to the full amount of their claims, or convert all of their claims into an exit facility.

In the liquidation alternative of the plan, creditors will receive the following treatment:

• Holders of other priority claims will receive payment in full in cash;

• Holders of secured tax claims will receive treatment in line with 1129 of the bankruptcy code or the collateral that secured their claims;

• If Union Bank’s disputed claim is allowed by the court, it will receive cash equal to the full amount of its claim, the collateral securing the claim, or proceeds from the sale of the collateral;

• Holders of Comerica Bank, Alliance Funding, Austin Truck, Caterpillar, John Deere, Ram Country, TBK Bank, TCF, VFS, VFSUS, and other secured claims will receive cash equal to the full amount of their claims, the collateral securing their claims, or proceeds from the liquidation of the collateral;

• Fort Wayne and Argonaut claims will be paid in line with their respective settlements;

• Holders of general unsecured claims will receive pro rata distributions from creditor trust assets and Union Bank sale proceeds;

• If Union Bank’s disputed unsecured claim is allowed by the court, it will receive a pro rata share of distributions from creditor trust assets;

• Holders of convenience claims will receive 25% of their claims, payable from the general unsecured claims cash distribution pool; and

• Holders of subordinated claims, preferred interests and common interests will receive a pro rata share of distributions from creditor trust assets after all senior claims are paid in full.

In the restructuring alternative of the plan, creditors will receive the following treatment:

• Holders of other priority claims will receive payment in full in cash;

• Holders of secured tax claims will receive treatment in line with 1129 of the bankruptcy code or the collateral that secured their claims;

• If Union Bank’s disputed claim is allowed by the court, it will receive cash equal to the full amount of its claim, the collateral securing the claim, or issuance of a class 3 note;

• Holders of Comerica Bank secured claims will receive cash equal to the full amount of their claims, reinstatement of their claims, or return of the collateral securing their claims;

• Holders of Alliance Funding, Austin Truck, John Deere, Ram Country, TBK Bank, VFS, VFSUS, and other secured claims will receive cash equal to the full amount of their claims, reinstatement of their claims, the collateral securing their claims, or issuance of a secured claim note;

• Caterpillar, TCF, Fort Wayne and Argonaut claims will be paid in line with their respective settlements;

• Holders of general unsecured claims will receive pro rata distributions from the general unsecured claims cash distribution pool, creditor trust assets and Union Bank sale proceeds;

• If Union Bank’s disputed unsecured claim is allowed by the court, it will receive a pro rata share of distributions from the general unsecured claims cash distribution pool and creditor trust assets;

• Holders of convenience claims will receive 25% of their claims, payable from the general unsecured claims cash distribution pool;

• Holders of subordinated claims, preferred interests and common interests will receive a pro rata share of distributions from creditor trust assets after all senior claims are paid in full; and

• On the effective date, new interests will be issued to the plan sponsor.

The Dripping Springs, Tex.-based waste management company filed bankruptcy on Oct. 14, 2021 under Chapter 11 case number 21-42423.

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