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Plan of reorganization
The Container Store has secured court approval of its chapter 11 plan, which hands over control of its equity to the lenders on its debtor-in-possession (DIP) financing.
Judge Alfredo Perez of the US Bankruptcy Court for the Southern District of Texas confirmed the plan at a hearing on Friday afternoon (Jan. 24).
The specialty retail chain filed for chapter 11 in December with a prepackaged plan of reorganization backed by 90% of its lenders. The plan set up a quick 35-day timeline to confirmation.
The company funded the case with a DIP that provided $40mn in new money and rolled up $75mn in prepetition term loans. The company also had a DIP that provided additional liquidity on its $80mn asset-based loan. All of the DIP financing converts to exit loans under the plan, giving the DIP lenders 64% of the reorganized company’s equity. All prepetition term loan lenders had the right to participate in the financing.
The plan also converts $163mn in prepetition loans to equity, subject to dilution by the DIP conversion.
Source: First-day declaration
Under the plan, the company repaid all $26mn in unsecured trade debt and $11mn in lease obligations.
Pat Holohan
patrick.holohan@levfininsights.com
+1 917 654 0337
