HORNBECK OFFSHORE SERVICES, INC. Item 1.03. Bankruptcy or Receivership.
As previously disclosed, effective
On
The Company expects that the effective date of the Plan (as defined in the Plan, the "Effective Date") will occur after all conditions precedent to the Plan have been satisfied, including applicable domestic and foreign government antitrust clearances. Although we are targeting occurrence of the Effective Date as soon as reasonably practicable, we can make no assurances as to when, or ultimately if, the Plan will become effective. It is also possible that technical amendments could be made to the Plan prior to the Effective Date.
Pursuant to the Plan, the Company's common stock,
The organizational documents of the reorganized Company will become effective on
the Effective Date, and will authorize the reorganized Company to issue shares
of new common stock,
The following is a summary of the material terms of the Plan. This summary highlights only certain substantive provisions of the Plan and is not intended to be a complete description of the Plan. This summary is qualified in its entirety by reference to the full text of the Plan and the Confirmation Order, which are attached hereto as Exhibit 2.1, and incorporated by reference herein. Any capitalized terms not defined in this Current Report on Form 8-K have the meanings assigned to them in the Plan.
The Plan of Reorganization and Treatment of Claims and Interests
The Plan contemplates the following treatment of claims against and interests in the Debtors:
• Each Holder of an Allowed ABL Claim received upon entry of the Interim
DIP Order: (i) payment in full in Cash of such Holder's Allowed ABL
Claim, other than any portion thereof on account of the ABL Redemption
Fee; and (ii) with respect to any portion of such Holder's Allowed ABL
Claim on account of the ABL Redemption Fee, its Pro Rata share
(determined as a percentage of all Allowed ABL Claims on account of the
ABL Redemption Fee) of the DIP Redemption Fee.
• Each Holder of an Allowed First Lien Claim under the Company's First Lien
Term Loan Agreement shall receive: (i) if such Holder is an Eligible
Holder, its Pro Rata share (determined as a percentage of all Allowed
First Lien Claims excluding any portion of such Allowed First Lien Claims
on account of the First Lien Redemption Fee) of (y) subject to the U.S.
Citizen Determination Procedures, 24.6% of the New Equity (subject to
dilution by the DIP Exit Backstop Premium, the Backstop Commitment
Premium, the Management Incentive Plan, and the exercise of the New
Creditor Warrants) and (z) the First Lien Subscription Rights; (ii) if
such Holder is a Non-Eligible Holder, a Cash payment equivalent to the
Holder's recovery under clause (i) if such Holder had been deemed an
Eligible Holder; (iii) its Pro Rata share (determined as a percentage of
all Allowed First Lien Claims excluding any portion of such Allowed First
Lien Claims on account of the First Lien Redemption Fee) of the Exit
Second Lien Facility; and (iv) with respect to any portion of such
Holder's Allowed First Lien Claim on account of the First Lien Redemption
Fee, its Pro Rata share (determined as a percentage of all Allowed First
Lien Claims on account of the First Lien Redemption Fee) of the Specified
2L Exit Fee.
• Each Holder of an Allowed Second Lien Claim under the Company's Second
Lien Term Loan Agreement shall receive: (i) if such Holder is an Eligible
Holder, its Pro Rata share (determined as a percentage of
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all Allowed Second Lien Claims) of (x) subject to the U.S. Citizen
Determination Procedures, 5.1% of the New Equity (subject to dilution by
the DIP Exit Backstop Premium, the Backstop Commitment Premium, the
Management Incentive Plan, and the exercise of the New Creditor
Warrants), (y) 15.0% of the New Creditor Warrants and (z) the Second Lien
Subscription Rights; and (ii) if such Holder is a Non-Eligible Holder, a
Cash payment equal to 6.1% of such Holder's Allowed Second Lien Claim.
• Each Holder of an Allowed 2020 Notes Claim under the 2020 Indenture or of
an Allowed 2021 Notes Claim under the 2021 Indenture shall receive, in
full and final satisfaction, settlement, release, and discharge of, and
in exchange for each 2020 Notes Claim or 2021 Notes Claim, respectively:
(i) if such Holder is an Eligible Holder, its Pro Rata share (determined
as a percentage of all Allowed 2020 Notes Claims and Allowed 2021 Notes
Claims, collectively, the "Allowed Unsecured Notes Claims") of
(x) subject to the U.S. Citizen Determination Procedures, 0.3% of the New
Equity (subject to dilution by the DIP Exit Backstop Premium, the
Backstop Commitment Premium, the Management Incentive Plan, and the
exercise of the New Creditor Warrants), (y) 85.0% of the New Creditor
Warrants and (z) the Noteholder Subscription Rights; and (ii) if such
Holder is a Non-Eligible Holder, a Cash payment equal to 0.5% of such
Holder's Allowed Unsecured Notes Claim.
• Each Holder of an Allowed General Unsecured Claim shall receive, at the
option of the applicable Debtor(s) with the consent of the Required
Consenting Creditors, either: (i) Reinstatement of such Allowed General
Unsecured Claim and satisfaction thereof in full in the ordinary course
of business in accordance with the terms and conditions of the particular
transaction giving rise to such Allowed General Unsecured Claim; or
(ii) such other treatment rendering its Allowed General Unsecured Claim
Unimpaired in accordance with section 1124 of the Bankruptcy Code.
• Except to the extent otherwise provided in the Restructuring Steps
Memorandum, each Allowed Intercompany Claim shall, at the option of the
applicable Debtors (or Reorganized Debtors, as applicable), either on or
after the Effective Date, be: (i) Reinstated; or (ii) cancelled and shall
receive no distribution on account of such Claims and may be compromised,
extinguished, or settled in each case, on or after the Effective Date.
• All equity interests in Hornbeck will be cancelled, released, and
extinguished, and will be of no further force or effect.
• Except to the extent otherwise provided in the Restructuring Steps
Memorandum, on the Effective Date, Intercompany Interests shall, at the
option of the Debtors, with the consent of the Required Consenting
Creditors, either be: i) Reinstated or ii) discharged, cancelled,
released, and extinguished and of no further force or effect without any
distribution on account of such Interests.
• Section 510(b) Claims will be cancelled, released, discharged, and
extinguished as of the Effective Date, and will be of no further force or
effect, and Holders of Section 510(b) Claims will not receive any
distribution on account of such Section 510(b) Claims.
• Each Holder of an Allowed Other Secured Claim shall receive, at the
option of the applicable Debtor(s) with the consent of the Required
Consenting Creditors, either: (i) payment in full in Cash; (ii) delivery
of collateral securing any such Claim and payment of any interest
required under section 506(b) of the Bankruptcy Code; (iii) Reinstatement
of such Allowed Other Secured Claim; or (iv) such other treatment
rendering its Allowed Other Secured Claim Unimpaired in accordance with
section 1124 of the Bankruptcy Code.
• Each Holder of an Allowed Other Priority Claim shall receive, at the
option of the applicable Debtor(s), either: (i) payment in full in Cash;
or (ii) such other treatment rendering its Allowed Other Priority Claim
Unimpaired in accordance with section 1124 of the Bankruptcy Code.
• Notwithstanding the foregoing, with respect to subpart (i) in each of the
second, third and fourth bullet points above, the New Equity issuable to
each Eligible Holder of Allowed First Lien Claims, Allowed Second Lien
Claims or Allowed Unsecured Notes Claims, as applicable, including on
account of the
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exercise of First Lien Subscription Rights, Second Lien Subscription
Rights or Noteholder Subscription Rights, as applicable, shall be in the
form of (x) New Equity to the extent permitted under the Jones Act
Restriction and (y) New Jones Act Warrants to the extent that New Equity
cannot be issued to such Eligible Holder because it is a Non-U.S. Citizen
and the pro rata share of New Equity to be delivered to it under all
sections of this Plan (including pursuant to the Equity Rights Offering
and the Backstop Commitment Agreement), when added to the New Equity
being issued under this Plan (including pursuant to the Equity Rights
Offering and the Backstop Commitment Agreement) to
other Non-U.S. Citizens as of the Effective Date, would exceed the Jones
Act Restriction.
Information regarding the assets and liabilities of the Company as of the most
recent practicable date is hereby incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
Releases and Exculpations
The Plan provides releases and exculpations for the benefit of the Debtors, certain of the Debtors' claimholders, other parties in interest and various parties related thereto, each in their capacity as such, from various claims and causes of action, as further set forth in the Plan.
Rights Offering
The Company has received subscriptions pursuant to a rights offering with
respect to shares of New Equity, including under the Backstop Commitment
Agreement. It is contemplated that the rights offering of
Exit Financing
The Plan provides for a post-Effective Date first-lien senior secured term loan credit facility and a second-lien senior secured term loan credit facility, subject to certain customary conditions, and on the terms set forth in the Exit First Lien Facility Term Sheet and the Exit Second Lien Facility Term Sheet, attached as Exhibit C and Exhibit D, respectively to the disclosure statement for the Plan (the "Disclosure Statement"). A copy of the Disclosure Statement is available at https://cases.stretto.com/hornbeck/court-docket/plan-solicitation/.
Management Incentive Plan
The reorganized Company will reserve exclusively for executives, senior
management, certain consultants and advisors (excluding directors) of the
Company (such reserve, the "
Forward-Looking Statements
This communication contains forward-looking statements, including, in particular, statements about the term and the provisions of the Plan and the intended consummation of the Plan. These statements are based on the Company's current assumptions, expectations and projections about future events. Although the Company
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believes that the expectations reflected in these forward-looking statements are reasonable, the Company can give no assurance that the expectations will prove to be correct. . . .
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description 2.1 Order of theBankruptcy Court , datedJune 19, 2020 , confirming Hornbeck's Joint Prepackaged Plan of Reorganization under the Bankruptcy Code, together with such Joint Prepackaged Plan of Reorganization. 5
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