Avaya which is looking to find a viable path to exit Chapter 11 said that its First Amended Plan Support Agreement dated August 6, 2017 has been executed by holders of over two-thirds in amount of the total amount of its First Lien Debt.
This is in line with company’s earlier announcement, when it said that it has entered into a plan support agreement (PSA) with holders of over 50% of its first lien debt including certain members of the ad hoc group of first lien creditors. The first lien debt holders receive payment before all other debt holders, and have the legal right to seize property from a borrower.
Avaya said among other things, the PSA requires the parties who sign it to vote in favour of the First Amended Chapter 11 Plan of Reorganization of Avaya Inc. and Its Debtor Affiliates, dated September 8, 2017 when solicited in accordance with the Bankruptcy Code. The Company continues to believe that, once it has completed solicitation of votes and received the requisite votes, the Amended Plan is confirmable.
Earlier, the Bankruptcy Court approved the disclosure statement with respect to the Amended Plan on August 25, 2017, clearing the way for Avaya to begin soliciting votes for the Plan. A hearing for the Bankruptcy Court to consider confirmation of the Amended Plan is scheduled for November 15, 2017.
Key terms of the amended plan include: the reduction of Avaya’s debt by more than $3 billion from pre-filing levels; settlement and transfer to PBGC of Avaya’s obligations under the APPSE; Avaya’s continued support of its obligations under the Avaya Pension Plan; and initiation of steps to enable Avaya to emerge from chapter 11 as a public company.
