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November 18, 2020 – The Debtors filed a motion to extend the periods during which they have an exclusive right to file a Plan and solicit acceptances thereof, through and including February 17, 2021 and April 19, 2021, respectively [Docket No. 593]. Absent the requested relief, the exclusive Plan filing and solicitation periods are scheduled to expire on November 19, 2020 and January 19, 2021, respectively.
On October 15, 2020, the Court hearing the Global Eagle Entertainment cases approved the $675.0mn sale of substantially all of the Debtors assets to Gee Acquisition LLC (the “Stalking Horse Bidder” or “Purchaser,” see further on sale below) and on November 13th, the Debtors filed a Plan of Liquidation and a related Disclosure Statement [Docket Nos. 577 and 578, respectively] and proposed a January 26th Confirmation Hearing.
The extension motion explains, “The Debtors spent the first three months of the Chapter 11 Cases obtaining entry of the Bidding Procedures Order, pursuing a post-petition marketing process for the sale of their assets in accordance with the Bidding Procedures Order, and, ultimately, obtaining entry of the Sale Order on October 15, 2020, which approved the sale to the Stalking Horse Bidder. The Debtors have made good progress in negotiations with their creditors and toward an exit from chapter 11.
Among other things, the Sale Order incorporates a settlement (the ‘Committee Settlement’) between the Debtors, the Ad Hoc DIP and First Lien Lender Group, and the Creditors’ Committee that anticipates, pursuant to the terms of the Sale Order and the Plan, among other things, (a) a distribution of up to $8.5 million to holders of allowed unsecured claims pursuant to the Plan and (b) ensures that the Debtors retain sufficient funds following the closing of the Sale Transaction to satisfy all administrative and priority claims required to be paid pursuant to, and on the terms set forth in, the Sale Order and the Plan. In addition, the Plan reflects the terms of an agreement in principle (the ‘Second Lien Settlement’) among the Debtors, the Ad Hoc DIP and First Lien Lender Group, and the Searchlight Parties, in their capacity as holders of Second Lien Note Claims, pursuant to which the Debtors, the Searchlight Parties, and the Ad Hoc DIP and First Lien Lender Group support the treatment of the Second Lien Note Claims as set forth in Article III.B.3(c)(1) of the Plan, and the holders of Convertible Notes Claims and General Unsecured Claims will receive their Pro Rata Share of $4 million. As anticipated pursuant to the Committee Settlement, the Debtors filed the Plan on November 13, 2020 together with the Disclosure Statement. The hearing for approval of the Disclosure Statement and related solicitation procedures is set for December 16, 2020.
Since the Petition Date, the Debtors have focused on transitioning their operations into chapter 11 while formulating and running a value-maximizing sale process. Nevertheless, there is still more to be done and the Debtors need more time. The Debtors intend to use the additional time to close the Sale Transaction and seek confirmation of the Plan.”
The Court scheduled the hearing to consider the motion for December 17, 2020, with objections due by December 2, 2020.
The Stalking Horse Bidder is an entity established at the direction of holders of approximately 90% of the Debtors’ senior secured first-lien term loans (including Apollo Global Management, Inc., Eaton Vance Management, Arbour Lane Capital Management, L.P., Sound Point Capital Management, Mudrick Capital Management, and certain funds and accounts under management by BlackRock Financial Management, Inc., together, the “Investor Group”) and the Stalking Horse APA, which details a $675.0mn (mostly) credit bid, is attached to the the sale order as Exhibit A [Docket No. 518].
In a press release announcing the Court's go-ahead on the sale, the Debtors stated: "As a result of the sale, Global Eagle will reduce its total debt by approximately $475 million and obtain significant additional liquidity, positioning it to continue driving long-term innovation and growth….The sale, which is subject to certain customary closing conditions and regulatory approval, is expected to close by the first quarter of 2021."
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