The United States Bankruptcy Court for the Southern District of Texas approved CBL Properties’ plan of reorganization. On Nov. 1, 2020, CBL filed petitions in for voluntary relief under Chapter 11 of Title 11 of the United States Bankruptcy Code. CBL received support for the plan, with more than 95% of votes cast for all classes in favor of the plan’s confirmation. The effective date of the plan is expected to be Nov. 1.
“This confirmation is a huge milestone for CBL,” Stephen D. Lebovitz, CEO of CBL, said. “After months of hard work and collaborative negotiation, we are thrilled to receive such unprecedented support of our plan from every creditor group, as well as preferred and common equity. This plan provides a favorable recovery to every constituency and a strong path forward for our company and our business. Over the next few months, we will be working to close these complex transactions and will emerge on Nov. 1 as a reenergized company with a bright future and flexible capital structure.”
As confirmed, the plan calls for a restructuring of the company’s balance sheet to provide for the elimination of more than $1.6 billion of debt and preferred obligations as well as a reduction in interest expense. In exchange for their approximately $1.375 billion in principal amount of unsecured notes and $133 million in principal amount of a secured credit facility, consenting noteholders and other noteholders will receive, in the aggregate, $95 million in cash, $555 million of new senior secured notes, of which up to $100 million, upon election by the consenting noteholders, may be received in the form of new convertible secured notes, and 89% in common equity of the newly reorganized company. Certain consenting noteholders will also provide up to $50 million of new money in exchange for additional convertible secured notes. The remaining bank lenders, holding $983.7 million in principal amount under the secured credit facility, will receive $100 million in cash and a new $883.7 million secured term loan. Existing common and preferred stakeholders are expected to receive up to 11% of common equity in the newly reorganized company.
