New Page Seeks $850 Million In Loans To Exit Chapter 11 Bankruptcy, Reorganize

by Tara Arick on November 1, 2012 · 0 comments

in Bankruptcy

- From LexisNexis® Mealey’s™ Daily Legal News.

Bankrupt New Page Corp. on Oct. 29 moved in the U.S. Bankruptcy Court for the District of Delaware for $ 850 million in financing to help it exit Chapter 11 bankruptcy (In Re: New Page Corporation, No. 11-12804, Chapter 11, D. Del. Bkcy.).

New Page filed for Chapter 11 bankruptcy on Sept. 7, 2011.

Loans

The company seeks authorization for exit financing comprising a $ 500 million term loan facility and a $350 million revolving facility.

Under the financing plan, the reorganized New Page would use the proceeds of the exit facility and the term loan to fund distributions to creditors, including repayment of claims arising under the DIP financing facility and a cash distribution to the first lien note holders.

The exit facility and the term loan would also cover payment of cash distributions pursuant to the settlements embodied in the plan of reorganization, and it would fund the reorganized New Page’s working capital needs once it emerged from Chapter 11.

The administrative and collateral agent for the proposed $ 500 million term loan would be Goldman Sachs Lending Partners LLC (GSLP) or another financial institution selected by GSLP. The actual lenders for the loan would be GSLP, JPMorgan Chase Bank N.A. and Barclays Bank PLC.

11 U.S. Code Section 503

The administrative and collateral agent on the $350 revolving loan would be JPMorgan Chase Bank, with co-collateral Wells Fargo Bank N.A.

The lenders for the revolving loan would comprise a syndicate of banks, financial institutions and other entities arranged by J.P. Morgan Securities LLC, GSLP, Wells Fargo and Barclays Bank.

New Page argues that the loans it seeks constitute allowed administrative expenses pursuant to 11 U.S. Code Section 503(b).

Moreover, the company maintains that incurring the fees, indemnities, costs and expenses related to the loans is a sound exercise of New Page’s business judgment.

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