Cenveo Gets Judge's OK For Ch. 11 Plan, Exit Financing
A New York bankruptcy judge has approved envelope maker Cenveo Inc.’s Chapter 11 reorganization plan, setting the company on the path to re-emerge from bankruptcy minus what the company says is more than $800 million in debt.
U.S. Bankruptcy Court Judge Robert C. Drain signed an order approving the plan Aug. 21, putting into effect a plan the company said in a press release had the approval of the “overwhelming” number of its creditors.
“The terms of the plan will enable the company to exit Chapter 11 with a substantially deleveraged balance sheet and increased liquidity, allowing the company to focus on its operations and grow its businesses,” the release said.
The Stamford, Connecticut-based company said in the release that 97 percent of its first-lien secured noteholders, all of its second-lien noteholders and 91 percent of its general unsecured creditors voted to approve the plan.
“These numbers represent overwhelming support from Cenveo's creditors for the plan,” it said.
The 99-year-old company — one of the largest U.S. printing and envelope companies — declared bankruptcy on Feb. 2, saying it was seeking to shed $700 million in debt.
The final proposed plan included revisions the company said were the result of a global settlement with the unsecured creditors' committee and an ad hoc noteholders group.
The revisions include bumping a $1.5 million fund for unsecured creditors to a $7 million fund for unsecured creditors and second-tier lienholders, cutting the take-back debt from $200 million to $100 million, preserving union agreements and pension obligations and releasing any claims against current and former directors and officers.
The settlement ended an investigation by the unsecured creditors’ committee into allegations that Cenveo’s controlling shareholders engaged in insider dealings to create a restructuring support agreement that shortchanged second-tier noteholders.
On Thursday, Judge Drain approved the company’s Chapter 11 exit financing, consisting of a $175 million asset-based revolving credit facility and a $236 million senior secured first-lien term loan credit facility.
In the release Cenveo said only $68 million of the $175 million facility was expected to be used upon emergence, creating $65 million of liquidity for the company.
Cenveo is represented by Jonathan S. Henes, Joshua A. Sussberg, George Klidonas, James H.M. Sprayregen, Melissa N. Koss and Gregory F. Pesce of Kirkland & Ellis LLP.
The case is In re: Cenveo Inc. et al., case number 7:18-bk-22178, in the U.S. Bankruptcy Court for the Southern District of New York.
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