By Jacqueline Palank
Eastman Kodak Co. (EKDKQ) next week will seek court approval to
let its creditors start voting on its latest restructuring plan,
which offers improved payment terms to two key creditor groups.
The Manhattan bankruptcy court on Tuesday will review Kodak's
disclosure statement, or restructuring plan outline, which its
creditors will use to vote on the plan.
That plan now calls for a $406 million rights offering. Kodak
plans to use the proceeds from the sale of 34 million new common
shares to pay off bondholders owed $375 million. Previously, the
bondholders were to have received equity in the restructured
Kodak.
Kodak's unsecured creditors and retirees, a group owed $2.8
billion, could purchase up to six million shares of Kodak's new
shares under the proposed rights offering. Previously slated to
receive 15% of Kodak's new stock under its original restructuring
plan, the unsecured creditors and retirees will instead share in
cash and warrants to purchase additional stock beyond the shares
set aside for them in the restructuring.
Some of Kodak's bondholders, including GSO Capital Partners and
BlueMountain Capital, have agreed to backstop the rights offering
by buying up any shares that go unsold. In return, Kodak is seeking
court permission to pay them about $16.24 million in commitment
fees and a $4.06 million closing fee.
In addition to the disclosure statement, the bankruptcy court
will also consider the rights offering and related fees at
Tuesday's hearing.
Also on Tuesday, AMF Bowling Worldwide Inc. will seek to exit
Chapter 11 protection by way of a merger with upscale bowling-alley
chain Bowlmor.
The Richmond, Va., bankruptcy court will consider confirming
AMF's restructuring plan, which would combine the two companies to
create the world's biggest operator of bowling alleys.
Ownership of the new company, called Bowlmor AMF, would go to
AMF's junior lenders. Owed $80 million, the bondholders would
receive 20% of its common shares as well as the right to purchase
another 57.5% of those shares in a $50 million rights offering.
The remaining equity would be distributed to Bowlmor's current
owners, Chief Executive Tom Shannon and Chief Financial Officer
Brett Parker, who would keep those titles at the merged
company.
Senior lenders owed $213.7 million would be paid in full in cash
under AMF's restructuring plan. A settlement with general unsecured
creditors over potential plan disputes would see them recover $2.35
million of the $30 million to $35 million they are owed.
On Wednesday, Residential Capital LLC will defend a critical
deal with its government-owned parent before the Manhattan
bankruptcy court.
The mortgage company faces a raft of objections--from the
federal government's bankruptcy watchdog and its pension insurer,
investors, bond insurers and banks and others--to its proposed deal
to exit Chapter 11 with the help of government-owned parent Ally
Financial Inc.
Ally, which isn't under Chapter 11 protection, has agreed to pay
$2.1 billion to ResCap and creditors in return for protection from
litigation over ResCap's mortgage business. The broad scope of
those releases has caught the attention of a government bankruptcy
watchdog, who said the Ally releases may violate the Bankruptcy
Code.
The deal, which improves an earlier offer from Ally to pay $750
million to ResCap and its creditors, came on the heels of an
investigation into ResCap's relationship with its parent.
Former Judge Arthur Gonzalez filed his report under seal the day
before the settlement was reached, and creditor Berkshire Hathaway
Inc. (BRKA, BRKB) will ask the bankruptcy court to unseal the
report and make Judge Gonzalez's findings public at Wednesday's
hearing.
Also on the agenda for that hearing is a deal that cuts the
claims of bond insurer Financial Guaranty Insurance Co. to $596.5
million from $5.55 billion.
-Patrick Fitzgerald and Andrew R. Johnson contributed to this
article.
Write to Jacqueline Palank at
jacqueline.palank@dowjones.com.
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