Bouchard Transportation Co., Inc. – Further to Wells Fargo Settlement (with Wells Fargo to Contribute 415mn of Cash to Debtors’ Estates), Files Amended Plan of Reorganization Ahead of August 26th Plan Confirmation Hearing

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August 23, 2021 – The Debtors filed an Amended Plan of Reorganization and a related redline showing changes to the version filed on July 9, 2021 [Docket No. 1293]. 

Also on August 23rd, Judge Jones held a brief hearing to share that a settlement had been reached amongst, inter alia, the Debtors, the Debtors' official committee of unsecured creditors (the "Committee") and Wells Fargo. Wells Fargo, which closed on its purchase of the Debtors' Wells Fargo Collateral on August 12th (see further on sale below) had objected to "the Plan to the extent that the Debtors seek to use the Wells Fargo Sale Proceeds to satisfy the claims of administrative and/or junior creditors prior to payment in full of the Wells Fargo Claim, which is secured by a valid senior lien on the Wells Fargo Sale Proceeds" [Docket No. 1260]. 

A stipulation and/or settlement agreement has yet to be filed, but the amended Plan implies that the settlement centers on Wells Fargo's agreement to contribute $15.0mn of cash to the Debtors' estates in exchange for releases.

In addition to taking into account the Debtors' recently completed asset sales, the amended Plan also removes references to the Liquidation Trust, with that source of potentential recovery for general unsecured creditors largely replaced by the $15.0mn cash contribution to the Debtors' estates from Wells Fargo (this amount to cover wind-down expenses before flowing through to Class 4). General unsecured creditors in Class 4A will have access to the first $20.0mn of cash left by the waterfall for general unsecureds (this cash largely sourced from the Wells Fargo $15.0mn and the cash portion of the sale of the Debtors' Wells Fargo Collateral, see further on sale below) and then split any further amount with Wells Fargo which holds a deficiency claim in Class 4B.

On August 23, the Debtors also filed a Plan Supplement attaching key Plan-reated documents (see further below) [Docket No. 1294].

The following is an updated summary of classes, claims, voting rights and expected recoveries (defined terms are as defined in the Plan and/or Disclosure Statement):

  • Class 1 (“Other Secured Claims”) is unimpaired, presumed to accept and not entitled to vote on the Plan. The aggregate amount of claim is $15.8mn and expected recovery is 100%.
  • Class 2 (“Other Priority Claims”) is unimpaired, presumed to accept and not entitled to vote on the Plan. The aggregate amount of claim is $1.0mn and expected recovery is 100%.
  • Class 3 (“Prepetition Revolving Credit Facility Secured Claims”) is impaired and entitled to vote on the Plan. The aggregate amount of claims is $164.1mn and expected recovery is Contingent/Unknown. Each Holder shall receive its Pro Rata share of (not to exceed the amount of such Holder’s Prepetition Revolving Credit Facility Secured Claim) the Sale Proceeds Recovery attributable to the Prepetition Revolving Credit Facility Collateral (ie the proceeds of the sale of the Wells Fargo Collateral).
  • Class 4A (“General Unsecured Claims”) is impaired and entitled to vote on the Plan. The aggregate amount of claims is $39.1mn and expected recovery is Contingent/Unknown. Each Holder shall receive: (i) the Sale Proceeds Recovery; and (ii) all Cash of the Post-Effective Date Debtor, after taking into account the WindDown Budget then in effect; provided that any recovery to Holders of Allowed General Unsecured Claims after the first $20 million of such recovery shall be shared Pro Rata between Holders of Allowed Claims in Class 4A and Class 4B as if such Claims comprised a single Class.
  • Class 4B (“Prepetition Revolving Credit Facility Deficiency Claims”) is impaired and entitled to vote on the Plan. The aggregate amount of claims is Contingent/ Unknown and expected recovery is Contingent/Unknown. Each Holder shall receive: (i) the Sale Proceeds Recovery; and (ii) all Cash of the Post-Effective Date Debtor, after taking into account the WindDown Budget then in effect; provided that Holders of Allowed Prepetition Revolving Credit Facility Deficiency Claims shall receive no recovery until Holders of Allowed General Unsecured Claims shall have received a total of $20 million (in the aggregate); provided, further, that any recovery thereafter shall be shared Pro Rata between Holders of Allowed Claims in Class 4A and Class 4B as if such Claims comprised a single Class.
  • Class 5 (“Intercompany Claims”) is unimpaired/impaired, presumed to accept or reject and not entitled to vote on the Plan. The aggregate amount of claims is N/A and expected recovery is 100%/0%.
  • Class 6 (“Section 510(c) Claims”) is impaired, deemed to reject and not entitled to vote on the Plan. The aggregate amount of claims is $40.4mn and expected recovery is Contingent / Unknown.
  • Class 7 (“Existing Equity Interests”) is impaired, deemed to reject and not entitled to vote on the Plan. The aggregate amount of claims is N/A and expected recovery is Contingent / Unknown.
  • Class 8 (“Intercompany Interests”) is unimpaired/impaired, presumed to accept or reject and not entitled to vote on the Plan. The aggregate amount of claim is N/A and expected recovery is 100% / 0%.
  • Class 9 (“Section 510(b) Claims”) is impaired, deemed to reject and not entitled to vote on the Plan. The aggregate amount of claims is $0 and expected recovery is Contingent / Unknown.

Proposed Key Dates:

  • Combined Hearing Date: August 26, 2021

On August 23, the Debtors also filed Plan Supplement to their Amended Plan of Reorganization [Docket No. 1294] and attached the following exhibits:

  • Exhibit A (i): Schedule of Retained Causes of Action
  • Exhibit A(ii): Redline to Exhibit A of the Initial Plan Supplement
  • Exhibit B(i): [Reserved]
  • Exhibit B(ii): Redline to Exhibit B of the Initial Plan Supplement
  • Exhibit C(i): Rejected Executory Contracts and Unexpired Leases List
  • Exhibit C(ii): Redline to Exhibit C of the Initial Plan Supplement
  • Exhibit D(i): Assumed Executory Contracts and Unexpired Leases Schedule
  • Exhibit D(ii): Redline to Exhibit D of the Initial Plan Supplement
  • Exhibit E: Wind Down Budget
  • Exhibit F: Identity and Compensation of Plan Administrator

Asset Sales

On August 5, 2021, the Court issued a pair of orders approving (i) the sale of the Debtors’ “Wells Fargo Collateral” (vessels encumbered by the prepetition Wells Fargo loans) to Pennantia LLC (a consortium comprised of Wells Fargo, “real asset special situations investment platform” Rose Cay GP, LLC and distressed debt specialist Contrarian Capital Management LLC) for an aggregate purchase price of $130.0mn (comprised of a $100.0mn credit bid of Wells Fargo debt and $30.0mn in cash) [Docket No. 1193] and (ii) the sale of the Debtors “DIP Collateral” assets (vessels encumbered by liens securing the Debtors’ debtor-in-possession financing) to JMB Capital Lending Partners, LLC (“JMB,” the Debtors’ DIP lender) for an aggregate purchase price of $115.3mn (including a credit bid of $90.0mn of DIP debt) [Docket No. 1194].

Wells Fargo Collateral Assets

  • Successful Bidder: A consortium comprised of Wells Fargo, “real asset special situations investment platform” Rose Cay GP, LLC and distressed debt specialist Contrarian Capital Management LLC with an aggregate purchase price of $130.0mn, comprised of a $100.0mn credit bid of Wells Fargo debt and $30.0mn in cash
  • Back-up Bidder(s): Keystone and Martin Operating Partnership
  • Assets: The Debtors’ vessels securing the the Wells Fargo loans ($164.1mn outstanding as at Petition date)

DIP Collateral Assets

  • Successful Bidder:  JMB Capital Lending Partners, LLC (“JMB”), the Debtors’ DIP lender with an aggregate purchase price of $115.3mn (the DIP financing is $90.0mn before interest)
  • Back-up Bidder: Hartree Partners, LP, (“Hartree”) the Debtors’ last-minute choice as stalking horse and one-time DIP lender ($110.0mn cash bid)
  • Assets: The Debtors’ vessels securing the Debtors’ DIP financing (list of vessels at Annex A of Hartree stalking horse APA, with assets aka, the “DIP Collateral” or “JMB First Lien Vessel Collateral”)

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