Answers Corp. DIP/First Lien Lender Group receives 96 percent of equity as debtor emerges pursuant to prepackaged plan of reorganization
Client(s) Answers Corp First Lien Steering Committee
Jones Day represented a group of first lien term loan lenders of Answers Holdings Inc., a leading global provider of high-quality internet content and customer solutions, in its prepackaged chapter 11 cases. The term loan lender group also provided Answers with a new money debtor-in-possession financing facility of approximately $25 million (plus certain letter of credit obligations) to fund the chapter 11 cases and finance the company's emergence.
On April 10, 2017, Judge Bernstein of the Bankruptcy Court for the Southern District of New York confirmed the company's prepackaged chapter 11 plan of reorganization after an uncontested confirmation hearing and only 38 days after the company filed for bankruptcy. The Plan was supported by holders of approximately 98 percent in amount of first lien claims and approximately 98 percent in amount of second lien claims. Not a single rejecting vote was received and not a single party filed an objection to the Plan.
Pursuant to the Plan, first lien lenders agreed to receive 96 percent of the equity in the reorganized company and their pro rata share of second lien exit loans in exchange for their approximately $366.2 million prepetition first lien secured claims. Second lien lenders agreed to receive 4 percent of the equity in the reorganized company and new warrants in exchange for their approximately $180.2 million prepetition second lien secured claims. In addition, the debtor-in-possession facility, which was used to finance the bankruptcy cases and the the company's emergence, was converted or "rolled" into first lien exit loans on the effective date.
The Plan went effective on April 14, 2017 upon the occurrence of the conditions precedent to effectiveness of the Plan, including execution and closing of first lien and second lien exit facilities as well as certain other agreements necessary for closing.
