- From LexisNexis® Mealey’s™ Daily Legal News.
Bankrupt AMF Bowling Worldwide Inc. on May 18 moved in the U.S. Bankruptcy Court for the Eastern District of Virginia for authorization to enter a credit agreement with Credit Suisse Securities LLC with a total value of $ 310 million that would also merge the company with Bowlmor, an independent operator of bowling centers (In Re: AMF Bowling Worldwide Inc., No. 12-36495, Chapter 11, E.D .Va. Bkcy.).
On Nov. 12, AMF filed for Chapter 11 bankruptcy in the Bankruptcy Court, citing debt of $ 296 million.
The debtor proposes a modified restructuring plan, sponsored by the Ad Hoc Group of Second Lien Lenders, that contains two parts. The first part is a $ 260 million senior exit loan that includes a $ 50 million line of credit from Credit Suisse. The second part is a $ 50 million second lien exit loan that will be raised via a rights offering made to each of AMF’s second lien lenders. That offering would also be financed by Credit Suisse, according to AMF’s motion.
The plan with Credit Suisse would pave the way for AMF’s plan to be combined with Strike Holdings LLC, commonly known as Bowlmor.
AMF maintains that its proposal is within its sound business judgment and proper under 11 U.S. Code Section 363(b)(1).
When AMF filed for Chapter 11 bankruptcy, Chief Financial Officer Stephen S. Satterwhite filed a first-day declaration in which he said that as a result of the economic downturn in 2008, AMF hired Moelis & Co. LLC to assist AMF in marketing and selling substantially all of AMF’s assets. In December 2011, Moelis contacted 168 parties to gauge their interest in a potential purchase, but only two potential buyers emerged.
In the end, neither of the two potential purchasers followed through based on concerns raised when they conducted due diligence into AMF’s business operations.
Sale Process Failed
Satterwhite said that following the failed sale process, and in the face of upcoming debt and liquidity concerns, AMF embarked on a path to organize its major creditor constituencies to negotiate, and ultimately implement, global restructuring.
Before filing for Chapter 11 bankruptcy, AMF and a majority of its first-lien secured lenders negotiated a restructuring term sheet that laid the foundation for a restructuring support agreement (RSA) designed to maximize recoveries for all parties in interest and shorten the debtors’ stay in Chapter 11.
AMF is represented by Dion W. Hayes of McGuire Woods in Richmond.