Starry Group gets approval of disclosure statement, DIP financing

By Sarah Lizee

Olympia, Wash., April 3 – Starry Group Holdings, Inc. received approval of the disclosure statement for its pre-packaged Chapter 11 plan and final approval of debtor-in-possession financing, according to orders filed Friday with the U.S. Bankruptcy Court for the District of Delaware.

The company’s DIP financing includes $43 million in new money term loans. The company already had access to $12 million following an interim order, and now has access to another $15 million. Following confirmation of the plan or approval of a sale of the company’s assets, the remaining $16 million of new money will be made available.

The DIP financing also includes a rollup of $15 million of prepetition loans, which became available following the interim order.

Objections to the disclosure statement, including from the official committee of unsecured creditors, were resolved.

The confirmation hearing is scheduled for May 24.

As previously reported, under a restructuring support agreement, the company is planning a debt-for-equity restructuring with its lenders but will first conduct a marketing and auction process to identify any other potential bidders for its business.

In the event of a restructuring, the debtors’ exit financing will comprise $11 million of new money funding on a committed basis and $10 million on an uncommitted basis. This would be in addition to rolled-over DIP-to-exit facility loans in the amount of $43 million.

Under the plan, general administrative claims, professional fee claims, priority tax claims and other priority claims will be paid in full.

If the restructuring is completed, the DIP claims will be converted on a dollar-for-dollar basis into rollover exit loans and holders will receive new warrants. If a sale occurs, DIP lenders will be paid in full in cash.

Holders of other secured claims will receive payment in full in cash, the collateral securing their claims or other treatment leaving the claims unimpaired.

Holders of prepetition term loan claims will receive, if a restructuring occurs, a pro rata share of the new common equity, subject to dilution by the management incentive plan and new warrants. If a sale occurs, holders will receive their pro rata share of cash held by the debtors, less cash distributed to holders of other claims, the amount required to fund the professional fee escrow account and the wind-down budget. This class is impaired and entitled to vote.

In the event of a restructuring, holders of general unsecured claims will receive their pro rata share of the greater of (a) $250,000; and (b) the difference between the amount of professional fees of the debtor and committee professionals minus the actual amount of professional fees and expenses allowed at any time, subject to a cap of $2 million. Non-participating general unsecured claimholders will receive nothing in this scenario.

In the event of a sale, holders of general unsecured claims will receive their pro rata share of (a) $250,000; (b) the difference between the amount of professional fees of the debtor and committee professionals minus the actual amount of professional fees and expenses allowed at any time, subject to a cap of $2 million; and (c) cash, if any, after holders of senior claims have been satisfied in full. Under this scenario, non-participating claimholders will receive cash, if any, after holders of senior claims have been satisfied in full.

General unsecured claimholders are impaired and entitled to vote.

Holders of intercompany claims and intercompany interests will receive nothing.

In the event of a sale, holders of subordinated claims and equity interests will receive cash, if any, after payment of senior claims. Otherwise, these classes will receive nothing.

Starry is a Boston-based internet service provider. The company filed bankruptcy on Feb. 20 under Chapter 11 case number 23-10219.

© 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.