BP Clothing tweaks lender treatment; all voting creditors accept plan

By Caroline Salls

Pittsburgh, April 19 - BP Clothing LLC filed an amended plan of reorganization and related disclosure statement Thursday with the U.S. Bankruptcy Court for the Southern District of New York that changes the proposed treatment for holders of senior lender first-out obligation claims.

Specifically, as under the original plan, holders of the first-out obligation claims will still receive 65% of the reorganized company's common units.

However, under the amended plan, Orpheus Holdings LLC and Orpheus Holdings Ltd. agreed that a portion of the distribution to which they would otherwise be entitled for their secured lender second-out obligation claims will be distributed to holders of senior lender first-out obligation claims other than the Orpheus entities and lender claimant MVC.

According to the amended disclosure statement, Orpheus Holdings LLC would otherwise be entitled to receive 7.5% of the new common units for its second-out obligation claim and Orpheus Holdings Ltd. would be entitled to 7.6% of the new common units.

Under the original plan, Orpheus Holdings LLC was scheduled to turn 21.5% of its second-out obligations common units over to the first-out obligations creditors.

As previously reported, BP Clothing's senior lenders will form a limited liability company on the plan effective date and will own 100% of the reorganized company.

Holders of senior lender first-out obligations and senior lender second-out obligations will exchange their reorganized debtor common units for NewCo common units under the plan.

Creditor treatment

Treatment of creditors will include the following:

• Holders of priority non-tax claims will be paid in full in cash;

• Holders of senior lender first-out obligation claims will receive 65% of the reorganized debtor common units.

However, the Orpheus Holdings entities agreed that a portion of the distribution to which they would otherwise be entitled on account of their senior lender second-out obligation claim will be distributed to the holders of senior lender first-out obligation claims, rather than Orpheus Holdings LLC, Orpheus Holdings Ltd. and MVC;

• Holders of senior lender second-out obligations will receive a share of 35% of the reorganized debtor common units;

• Holders of factor claims will be paid in cash under a factoring agreement or the agreement will be amended and restated; and

• Holders of subordinated lender claims, PIK lender claims, general unsecured claims and existing equity interests will receive no distribution.

Plan voting results

In addition, BP Clothing's amended plan was unanimously accepted by voting creditors, according to a ballot report filed Thursday with the court.

Specifically, the seven holders of $29.63 million in senior lender first-out obligation claims, the three holders of $17.41 million in senior lender second-out obligation claims and the one holder of factor claims voted to accept the plan.

The ballot tabulation said the factor claimholder was not owed any money on account of the claim.

The combined disclosure statement and plan confirmation hearing is scheduled for April 24.

BP Clothing is a New York-based women's apparel company that filed for bankruptcy on Dec. 12. Its Chapter 11 case number is 11-15696.

© 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.