|
< Return to Firm News ST&G Wins Better Terms For Unsecured Creditors In ARG June 23, 2005 On June 23, 2005 the U.S.
Bankruptcy Court for the Central District of California confirmed
reorganization plan in the chapter 11 cases of American Restaurant Group,
Inc. and its affiliates ("ARG"), which owned and operated approximately
90 Black Angus Steakhouse restaurants.
STG represented the Official Committee of Unsecured Creditors
("Unsecured Creditors Committee") in the ARG bankruptcy. At the time the chapter 11 cases were
filed, virtually all of the financial constituencies in the case, including ARG's
noteholders (who were owed approximately $180 million), its secured
creditors and its shareholders, had negotiated the terms of a plan of
reorganization ("Plan"). The
Plan was filed shortly after the filing of ARG's chapter 11 case and was
put on a "fast track" for confirmation, but did not have the support
of the Unsecured Creditors Committee.
The Plan provided for the Unsecured
Creditors to receive 1.9% of the stock of the reorganized company, with
a value
approximately equal to 8% of the creditors' claims. As a result
of STG's efforts, which included opposing
approximately 20 "first day" motions (many of which were of a
case-determinative
nature) and successfully opposing four versions of ARG's disclosure
statement,
ARG, its noteholders and its shareholders finally agreed to renegotiate
the Plan. The plan ultimately confirmed by the court provided
for Unsecured Creditors to receive 10% of the stock of the reorganized
company,
with a value approximately equal 50 cents on the dollar for the
creditors'
claims, or more than 5 times what was offered at the outset of the
case.
|
