Exide Bankruptcy, Lastest News

EXIDE BANKRUPTCY BREAKING NEWS: Bankrupt Exide gets nod to extend $560 million DIP loan; Exide gives up exclusive ability to file a Chapter 11 plan

LAW 360

Bankrupt Exide Gets Nod To Extend $560M DIP Loan

Law360, Wilmington (October 31, 2014, 6:09 PM ET) — A Delaware bankruptcy judge signed off Friday on Exide Technologies Inc.’s proposed extension of its $560 million debtor-in-possession financing package, but only after the battery maker agreed to terminate the Chapter 11 exclusivity period.
U.S. Bankruptcy Judge Kevin J. Carey blessed the debtor’s request to extend the DIP loan’s maturity date — a move that faced strong opposition from the official committee of unsecured creditors — after Exide accepted his condition that it must give up the exclusive ability to file a Chapter 11 plan.

The DIP motion satisfied the requirements for approval, Judge Carey said at a hearing in Wilmington, but fairness required ending exclusivity “so the committee, if it wishes, can put its money where its mouth is.”

Georgia-based Exide, in bankruptcy for over a year, announced Oct. 10 it had a reached a deal with DIP lenders Oct. 10 to push back the maturity date of the $560 million loan to March 31, a move the company said would provide additional and much-needed time to negotiate an exit from Chapter 11.

The creditors’ committee blasted the proposed DIP amendment in an Oct. 23 objection, saying Exide failed to seek out other forms of financing and urging to the court to order a “fair and appropriate” DIP financing process.

In addition, Exide’s amendment contained unreasonable sale milestones, the committee said, and would lead to a one-party reorganization or a “ridiculously quick credit bid sale,” both of which would favor certain secured noteholders.

On Friday, Judge Carey found that the DIP amendment is a proper exercise of the debtor’s business judgment.

Exide investigated alternatives and proposed its one available option, the terms of which were not unreasonable, Judge Carey said.

“All that said, we’ve reached a milepost,” the judge noted.

Decisions need to be made about an appropriate path forward in the case, the judge said, and the choices should become clear with the DIP approved and exclusivity ended.

“The committee can stop telling me there’s something better, and start showing me,” Judge Carey said.

An order ending the exclusivity period will be entered by Nov. 6.

One of the largest producers of lead batteries for the industrial and transportation markets, Exide sought court protection for its U.S. operations in June 2013, looking to restructure about $1 billion in debt.

The company cited numerous reasons for its entry into Chapter 11, including rising production costs, intense competition, reduced access to credit and an April 2013 order by a California regulatory agency that halted operations at one of its plants, a move blocked by a state judge’s ruling three months later.

Exide is represented by Anthony W. Clark, Kristhy M. Peguero, Kenneth S. Ziman, J. Eric Ivester and James J. Mazza Jr. of Skadden Arps Slate Meagher & Flom LLP.

The creditors committee is represented by Robert J. Dehney, Eric D. Schwartz and Erin R. Fay of Morris Nichols Arsht & Tunnell LLP and Kenneth A. Rosen, Sharon L. Levine and Gerald C. Bender of Lowenstein Sandler LLP.

The case is In re: Exide Technologies, case number 1:13-bk-11482, in the U.S. Bankruptcy Court for the District of Delaware.




Exide Chapter 11 Bankruptcy Loan Is Extended

Ruling Gives Unsecured Creditors Chance to Explore Other Options for Battery Maker

A federal judge Friday approved a revised bankruptcy loan for Exide Technologies Inc., but granted junior creditors the right to float their own Chapter 11 emergence plan for the distressed battery maker.

The ruling from Judge Kevin Carey opens up the Georgia company’s contentious Chapter 11 case, which has been marked by escalating problems with environmental regulators. Exide gets extended bankruptcy financing from a syndicate led by J.P. Morgan Chase & Co., but unsecured creditors will be free to compete with the company over how to get Exide out of Chapter 11.

“We have reached a milepost juncture,” Judge Carey said at a hearing in the U.S. Bankruptcy Court in Wilmington, Del.

Exide has been protected from the threat of rival reorganization proposals since filing for Chapter 11 bankruptcy in June 2013. Unsecured creditors, however, don’t like the course the company is steering. Friday’s ruling gives them a chance to explore other options for Exide, a global company with a substantial business.

Write to Peg Brickley at peg.brickley@wsj.com


Tags: , , , , , ,