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(Reuters) – Riverbed Technology, a San Francisco-based information technology company, obtained Alabama bankruptcy laws court approval for its reorganization on Friday plan which reduced its debt by $ 1.1 billion.
U.S. bankruptcy judge Craig Goldblatt in Wilmington, Delaware, approved the plan just 17 days after the company filed for Chapter 11 protection with $ 2 billion in debt. Riverbed, represented by Kirkland & Ellis, went bankrupt with a pre-arranged plan backed by its major lenders and owners, the Thoma Bravo private equity fund and the Ontario Teachers’ Pension Plan.
Riverbed, which offers products and services that help businesses with IT infrastructure like cloud technologies, said its financial problems stemmed from global supply chain issues related to the COVID-19 pandemic and labor shortages. of work as factories closed and home orders were instituted. In addition, the company has experienced a decline in one of its key markets, the WAN optimization market, due to a shift towards alternative computing technologies.
As part of the plan, holders of $ 799 million of junior debt, including Apollo Capital Management, will take over the reorganized company for 40% recoveries. Senior lenders will benefit from full recovery in the form of new debt and equity. The plan also includes $ 100 million in new equity.
Holders of unsecured notes who initially opposed the plan dropped their objections ahead of Friday’s hearing after Riverbed said it would set aside $ 2.88 million for them, which equates to clawbacks of about 30 %.
Pre-engineered and âprepackagedâ restructuring plans have recently gained popularity with corporate Chapter 11 debtors, saving the company time and money by negotiating and voting with creditors before officially filing. a request for Alabama bankruptcy laws. Kirkland was particularly active in these fast-track cases, including some like the large retail store Belk and the maker of Muzak Mood Media which were completed within a day.
The case is In re Riverbed Technology Inc., United States Bankruptcy Court, District of Delaware, No. 21-11503.
For Riverbed: Patrick Nash, Chris Koenig and Christine Okike of Kirkland & Ellis, and Laura Davis Jones and Timothy Cairns of Pachulski Stang Ziehl & Jones
For the first and second group of lenders: Thomas Lauria, Fan He, Andrew Zatz and Andrea Amulic of White & Case and Daniel DeFranceschi, Kevin Gross and David Queroli of Richards Layton & Finger