Legendary/EWB files Disclosure Statement.
The Plan provides for the reorganization of the Debtors’ affairs to create a strong, wellmanaged and well-financed operation. The Plan’s foundation is an $80 million recapitalization via a $5 million cash infusion by Legendary, conversion of approximately $65 million of the Proponents’ debt to equity and a $10 million rights offering to Holders of MMPI Existing Common Stock. Such Holders will also be offered the right to purchase up to a total of 44 million additional shares of Reorganized MMPI, equal to a 10% stake in Reorganized MMPI. This restructuring will greatly reduce the Reorganized Debtors’ debt service load permitting them to meet all of their obligations both in the short term and over the life of the Plan. Legendary’s cash contribution combined with the proceeds of the rights offering and the Debtors’ cash from operations will provide more than sufficient funds for the payment of all amounts due on or around the Plan’s Effective Date.
The Plan does not separately classify equity holders based upon insider status nor does it provide for disparate treatment for insider equity holders. The Plan provides for the cancellation of MMPI Existing Common Stock and the issuance of approximately 440.5 million shares of Reorganized MMPI common stock to stakeholders as follows. Holders of MMPI Existing Common Stock, who hold approximately 88.1 million shares in total, shall be issued one share of Reorganized MMPI in exchange for each share of MMPI Existing Common Stock they held on the Record Date.
Thus, Holders of MMPI Existing Common Stock shall be diluted to a combined 20% stake in Reorganized MMPI. However, Holders of MMPI Existing Common Stock shall also be offered the right to purchase up to a total of 44 million additional shares of Reorganized MMPI, equal to a 10% stake in Reorganized MMPI, at the price of $0.227 per share, with no limit on the total number of shares each Holder may purchase; provided, however, that in the event the offering is oversubscribed, each Holder shall be limited to a pro-rata acquisition based upon the following ratio: (number of MMPI shares held by each subscriber as of Record Date / number of MMPI shares of all subscribers as of Record Date). This offering shall comply with all rules necessary to ensure its exemption, under Section 1145 of the Bankruptcy Code, from federal, state and local security registration requirements; alternatively, it shall be made available only to Holders of MMPI Existing Common Stock who are “accredited investors.”
In exchange for converting approximately $65 million of their debt and Legendary’s $5 million equity contribution, the Proponents shall receive between 308.4 million and 352.4 million shares of Reorganized MMPI, equal to a stake of between 70% and 80% of Reorganized MMPI, dependent upon the outcome of the Reorganized MMPI Rights Offering described above.
Source: PACER (Docket 1672)
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