AeroCentury and its two U.S. subsidiaries (collectively the debtors) filed a proposed combined plan of reorganization and disclosure statement with respect to its proposed plan to exit Chapter 11 bankruptcy protection with the Delaware Bankruptcy Court.
The proposed plan was filed in connection with AeroCentury’s motion to approve a solicitation procedures order, which, among other things, requests that the court conditionally approve the combined plan/disclosure document for solicitation purposes only and authorizes the debtors to solicit votes to accept or reject the plan. The bankruptcy court set a hearing date of July 12 to hear the proposed motion and to consider approval of the solicitation procedures order.
“The filing of our proposed combined plan and disclosure statement and the request for approval of our claimant vote procedures represent further milestones towards the company’s emergence from Chapter 11,” Michael Magnusson, president of AeroCentury, said. “Discussions with potential plan sponsors are ongoing, and this filing allows us to keep on track for a timely exit from bankruptcy while also providing the time needed for the careful consideration of potential debt and/or equity investment terms that are being presented to the company.”
The proposed plan/disclosure document contemplates two potential paths to the debtors’ emergence from bankruptcy. The first is a sponsored plan scenario that is dependent upon the company finding a suitable plan sponsor that would enter into a plan sponsor agreement with the company to operate the debtors’ businesses on a go-forward basis and relaunch the debtors’ aircraft acquisition, leasing and disposition operations using capital to be provided by the plan sponsor. AeroCentury has not yet entered into any agreement with a plan sponsor.
The second path is a standalone plan scenario, which will occur if a plan sponsor is not found or an acceptable plan sponsor agreement is not reached with a plan sponsor. Under the standalone plan, the debtors’ remaining assets will be monetized for the benefit of stakeholders.
AeroCentury proposed that if an acceptable plan sponsor is found and a plan sponsor agreement is entered into, the company will disclose the identity of the plan sponsor and the terms of such a plan sponsor agreement in a plan supplement to be filed with the court prior to the vote on the proposed plan. AeroCentury further proposed that if a plan sponsor agreement is not executed by the voting deadline, the plan will proceed on the standalone plan scenario.
Solicitation of the plan is expressly subject to approval by the Delaware Bankruptcy Court and has not yet occurred.
