Performance Powersports Group’s Chapter 11 plan confirmed by court

By Sarah Lizee

Olympia, Wash., Oct. 5 – Performance Powersports Group, Inc.’s Chapter 11 plan of liquidation was confirmed by the U.S. Bankruptcy Court for the District of Delaware on Wednesday, according to an order.

As previously reported, the company received approval to sell its assets to an affiliate of its equity sponsor, Kinderhook Industries, LLC.

The purchase price was a credit bid of the outstanding debt under the company’s $10 million debtor-in-possession facility with Tankas Funding VI, LLC, another Kinderhook affiliate; $500,000 in cash; the assumption of debt under a prepetition first-lien credit agreement; other assumed liabilities; and a wind-down amount.

Under the plan, secured tax claims, other secured claims and other priority claims are unimpaired.

DIP facility claims were satisfied under the terms of the sale order.

Holders of 2021 credit agreement claims will waive any distribution from all except the purchaser. The terms will be agreed between Kinderhook and lender Twin Brook.

Holders of general unsecured claims will receive their pro rata share of beneficial trust interests, which will entitle them to receive their pro rata share of litigation trust assets. The Kinderhook general unsecured claim will be allowed as a general unsecured claim in the amount of $1 million.

Following payment in full of all allowed general unsecured claims, and after the funding of the other claims reserve and professional fee claim reserve, holders of subordinated claims will receive their pro rata share of the litigation trust assets.

Interests will be canceled. Following payment in full of all allowed general unsecured claims and subordinated claims, and after funding the other claims reserve and the professional fee claim reserve, interest holders will receive their pro rata share of the litigation trust assets. The Kinderhook equity interests will be allowed as an interest in the amount of $45 million.

Intercompany claims will be canceled with no distribution.

The Tempe, Ariz.-based producer of powersports equipment filed bankruptcy on Jan. 16, 2023 under Chapter 11 case number 23-10047.

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