Greektown Reorganization Agreement Reached

Here is the reorganization plan referenced in the article below — Greektown Reorganization Plan

From Fox Business via Pechanga:

Greektown Holdings, L.L.C. announced today that beneficial holders of a majority of the principal amount of its pre-petition bank debt have reached agreement to support the plan of reorganization filed on November 2, 2009 by plan sponsors MFC Global Investment Management, OppenheimerFunds, Inc., Brigade Capital Management and Solus Alternative Asset Management LP. That agreement has been supplemented by a stipulation adopted by the Bankruptcy Court on November 19, 2009 among the Debtors, the plan sponsors, an ad hoc group of certain of the Debtors’ pre-petition bank lenders, the indenture trustee for the holders of the Debtors’ 10.75% Senior Unsecured Notes due 2013, the administrative agent for the Debtors’ pre-petition bank debt and DIP Debt and the official committee for the Debtors’ unsecured creditors.

Under the plan which will be amended pursuant to the stipulation, the pre-petition bank lenders would be paid in cash in full on the effective date of the plan, and the holders of the Debtors’ 10.75% Senior Unsecured Notes due 2013 will receive the equity of the reorganized Debtors, subject to dilution by the rights offering provided for in the plan. The holders of the Senior Unsecured Notes would also have the right to subscribe for approximately 78% of the equity at an aggregate purchase price of $185 million in the rights offering. The four plan sponsors have agreed to purchase any equity in such rights offering that is not subscribed for by the holders of the Senior Unsecured Notes in the rights offering. In addition, Solus Alternative Asset Management LP would make a direct investment in the equity of the reorganized Debtors.

The plan sponsors and the ad hoc group of certain of the Debtors’ pre-petition bank lenders, led by Standard General and Caspian Capital Advisors, would also invest in new secured notes of the company having an aggregate principal amount of approximately $385 million. With the entire debt and equity package fully committed, and with the support of the creditor constituents, the plan sponsors anticipate that the new plan should be expeditiously confirmed without the need for further litigation.

“We believe our proposal is beneficial for both the city of Detroit and the state of Michigan,” said Arthur Calavritinos, Vice President with MFC Global Investment Management, which is the largest holder of the Senior Unsecured Notes, and “we are confident of the soundness of our plan and optimistic about the outcome.”

Soo Kim of Standard General said, “The largest lenders to Greektown agreed that a consensual approach was most beneficial to the estate. We were able to achieve a good outcome for the pre-petition lenders, support the bondholders in their plan of reorganization and most importantly, minimize the disruption and uncertainty that would come from a long and drawn out legal dispute.”

The plan sponsors are represented by Goodwin Procter LLP. The ad hoc group of certain of the Debtors’ pre-petition bank lenders supporting the plan are represented by Bracewell & Giuliani LLP.