Shiloh Industries, Inc. – Further to Asset Sale Closing, Requests Extension of Exclusive Plan Filing Period until February 26, 2021; Plan Expected in First Week of 2021

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December 23, 2020 – The Debtors filed with the Court 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 26, 2021 and April 27, 2021, respectively [Docket No. 557]. Absent the requested relief, the Plan filing period is scheduled to expire on December 28, 2020.

The sale motion noted that the sale of substantially all of the Debtors' assets to Grouper Holdings, LLC, an affiliate of MiddleGround Capital LLC, closed on November 30, 2020. With the sale closed, the Debtors said they will file a Plan no later than the first week of 2021, and, according to the motion, "the Debtors have shared a draft of the Plan with the Committee and the Debtors' secured lenders. The Debtors, the Committee and the Lenders continue to engage in productive negotiations, and the Debtors believe the parties are close to finalizing and filing a consensual Plan."

The extension motion further explains, “Since filing their chapter 11 cases (collectively, the ‘Chapter 11 Cases’), the Debtors have made significant progress toward their ultimate goal — maximizing the value of their assets for the benefit of their stakeholders — while simultaneously undertaking various measures to stabilize and maintain their prior operations and minimize costs to their estates. Among other things, in the four months since the commencement of the Chapter 11 Cases, the Debtors have accomplished the following: (a) secured debtor-in-possession financing to ensure access to liquidity necessary to administer these cases; (b) obtained Court approval of, and consummated, the sale of substantially all of the Debtors’ assets; and (c) made significant progress with key constituencies regarding a consensual plan of liquidation to wind down the Chapter 11 Cases (as it may be amended or modified, the ‘Plan’).

As part of their efforts to move these cases forward, the Debtors consistently have engaged in discussions and sought input from their key constituents. In this regard, the Debtors and their secured lenders agreed to set aside $14.1 million of sale proceeds to allow for orderly wind down of the Debtors’ estates. The Debtors, their secured lenders and the Committee later negotiated a settlement of sale objections that set aside an additional $3 million for the benefit of unsecured creditors. These two settlements will guide the structure of the Debtors’ plan in these cases.

It is against the backdrop of these activities and results that the Debtors seek to extend the periods within which they may exclusively file and solicit acceptances of a chapter 11 plan. The Debtors intend to file their plan in the first week of 2021 and are continuing discussions on the Plan’s terms with the Debtors’ secured lenders and the Committee. If confirmation of the Plan is successful, this would allow the Debtors to exit chapter 11 in the first quarter of next year. In contrast, allowing the Exclusive Periods to lapse and permitting the filing of competing plans would unnecessarily increase administrative expenses and cause delays to the resolution of the Chapter 11 Cases (neither of which the Debtors or their stakeholders can afford in a liquidation process).”

The hearing on the motion is scheduled for January 22, 2021, with objections due by January 6, 2021.

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