Wolverine Tube Inc (fka WLVTQ)

[ChuckD-MSB]

I love trading the Q's, and came across this one looking for the next potential opportunity, but by my read of the following article, it appears as if current equity and even preferred's will be wiped out. Am I missing something?


Wolverine Tube Inc., a producer of copper tubing for manufacturers of heating, ventilation and cooling equipment, began a prepackaged Chapter 11 reorganization today supported by holders of 71 percent of the $131 million in senior secured notes.

The reorganization plan, which Wolverine said it would file “shortly,” will convert the secured notes into all of the new common equity plus a new secured note for $30 million.

Wolverine said the filing was caused by declining revenue coupled with high copper prices, pension funding expenses, and interest on the senior notes. The plan is contingent upon a termination of the pension plan and the treatment of the resulting claim of the Pension Benefit Guaranty Corp. on terms acceptable to the noteholders.

The petition listed assets of $115.6 million against debt totaling $237.5 million.

The plan calls for paying general unsecured creditors in full as much as $6.7 million. Existing common and preferred shareholders are to receive nothing. Plainfield Asset Management LLC, a signatory to the plan-support agreement, is both a secured noteholder and a preferred shareholder.

In May 2009, Wolverine completed an exchange offer where $122 million of maturing 10.5 percent unsecured notes were exchanged for 15 percent senior secured notes that would have matured in 2012. The notes traded on Oct. 25 at about 47.5 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

The Huntsville, Alabama-based company said there was a “significant decline” in revenue. For 2010, revenue is estimated to be $281 million.

The case is In re Wolverine Tube Inc., 10-13522, U.S. Bankruptcy Court, District of Delaware (Wilmington).

http://www.bloomberg.com/news/2010-11-01/downey-tridimension-point-blank-loehmann-s-threat-to-sue-bankruptcy.html