Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on June 1, 2020, Libbey Inc. (the "Company"), Libbey
Glass Inc. ("Libbey Glass"), and each direct and indirect domestic subsidiary of
Libbey Glass (each a "Libbey Subsidiary" and, together with the Company and
Libbey Glass, the "Debtors") commenced voluntary cases (the "Chapter 11 Cases")
under Chapter 11 of the United States Code (the "Bankruptcy Code") in the United
States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court").
The Chapter 11 Cases are being jointly administered under the caption In
re: Libbey Glass Inc., et al., Case No. 20-11439 (LSS). On October 20, 2020, the
Bankruptcy Court entered an order confirming the First Amended Joint Plan of
Reorganization for Libbey Glass Inc. and its Affiliate Debtors under Chapter 11
of the Bankruptcy Code (as it may be amended, supplemented or otherwise
modified, the "Plan"). Copies of the Plan and the order confirming the Plan were
filed as exhibits 2.1 and 99.1, respectively, to the Company's Current Report on
Form 8-K filed with the Securities and Exchange Commission (the "SEC") on
October 20, 2020. Filings with the Bankruptcy Court related to the Chapter 11
Cases are available free of charge electronically at
https://cases.primeclerk.com/libbey. Information contained on, or that can be
accessed through, such website or the Bankruptcy Court is not part of this
Current Report on Form 8-K, and we disclaim liability for any such information.
DIP Credit Agreements
In connection with the Chapter 11 Cases, on June 3, 2020: (1) Libbey Glass Inc.
and Libbey Europe B.V., as borrowers (the "ABL Borrowers"), entered into the
Debtor-In-Possession Credit Agreement (the "DIP ABL Credit Agreement") with the
guarantors party thereto, the lenders party thereto from time to time, and
JPMorgan Chase Bank, N.A., as administrative agent; and (2) the Company, Libbey
Glass Inc., as borrower, the other Debtors, the other guarantors party thereto,
Cortland Capital Market Services LLC, as administrative agent and collateral
agent, and the lenders party thereto from time to time entered into the
Superpriority Secured Debtor-In-Possession Credit Agreement (the "DIP Term Loan
Credit Agreement" and, together with the DIP ABL Credit Agreement, the "DIP
Credit Agreements"). Copies of the DIP Term Loan Credit Agreement and DIP ABL
Credit Agreement were filed as exhibits 4.1 and 4.2, respectively, to the
Company's Current Report on Form 8-K filed with the SEC on June 9, 2020.
On November 5, 2020, pursuant to the terms of the DIP Term Loan Credit
Agreement, the Required Lenders (as defined in the DIP Term Loan Credit
Agreement) agreed to extend the date by which a Plan of Reorganization must be
consummated to November 12, 2020. On November 6, 2020, pursuant to the terms of
the DIP ABL Credit Agreement, the Administrative Agent (as defined in the DIP
ABL Credit Agreement) agreed to a corresponding extension under the DIP ABL
Credit Agreement. On November 11, 2020 and November 12, 2020, the Required
Lenders and the Administrative Agent, respectively, agreed to further extend
such dates to November 13, 2020.
Assignment and Assumption Agreement
On November 5, 2020, pursuant to the Plan, the Company and Libbey Glass entered
into that certain Assignment and Assumption Agreement (the "Assignment
Agreement"). Upon execution of the Assignment Agreement, the Company assigned
and transferred to Libbey Glass, and Libbey Glass acquired from the Company and
assumed all of the Company's right, title and interest in, to and under (i) all
employee compensation and benefit programs (the "Employee Plans") not expressly
rejected, including all trusts, trust agreements, insurance contracts,
administrative service agreements, investment management agreements or any other
contract or agreement relating to the funding and administration of such
Employee Plans and (ii) any other agreement, contract or guarantee in the name
of the Company (collectively, the "Acquired Assets"). Libbey Glass assumed from
the Company and agreed to pay, discharge and perform, all of the obligations and
liabilities of the Company in connection with the Acquired Assets.
The foregoing description of the Assignment Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Assignment Agreement, which is filed as Exhibit 10.1 to this Current Report on
Form 8-K and incorporated by reference herein.
Contribution and Exchange Agreement
On November 5, 2020, pursuant to the Plan, the Company and Libbey Holdings Inc.,
a Delaware corporation ("Holdings"), entered into that certain Contribution and
Exchange Agreement (the "Contribution Agreement"). Upon execution of the
Contribution Agreement, the Company contributed to Holdings 100% of the
outstanding common stock of Libbey Glass in exchange for 100 shares of Holdings
common stock.
The foregoing description of the Contribution Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Contribution Agreement, which is filed as Exhibit 10.2 to this Current Report on
Form 8-K and incorporated by reference herein.
Cautionary Note on Forward-Looking Statements
This Current Report on Form 8-K, including the exhibits hereto, includes
forward-looking statements as defined in Section 27A of the Securities Act and
Section 21E of the Securities Exchange Act of 1934, as amended. Such statements
reflect only the Company's best assessment at this time and are indicated by
words or phrases such as "goal," "plan," "expects," "believes," "will,"
"estimates," "anticipates," or similar phrases. These forward-looking statements
include all matters that are not historical facts. They include statements
regarding, among other things, the Company's intentions, beliefs or current
expectations concerning the timing of its emergence from Chapter 11. By their
nature, forward-looking statements involve risks and uncertainties because they
relate to events and depend on circumstances that may or may not occur in the
future. Investors are cautioned that forward-looking statements are not
guarantees of future performance and that our actual results of operations,
financial condition and liquidity, and the development of the industry in which
we operate, may differ materially from these statements. Investors should not
place undue reliance on such statements. Important factors potentially affecting
performance include but are not limited to risks and uncertainties related to
the ability to consummate the Plan; risks attendant to the bankruptcy
process and the length of time that we may be required to operate in bankruptcy;
the effectiveness of the overall restructuring activities pursuant to the
Chapter 11 Cases and any additional strategies that we may employ to address our
liquidity and capital resources; restrictions on us due to the terms of the
proposed exit financing arrangements and restrictions imposed by the applicable
courts; the effects of the Chapter 11 Cases on the Company and on the interests
of various constituents, including holders of the Company's common stock; other
litigation and inherent risks involved in a bankruptcy process; risks related to
the trading of the Company's securities on the OTC Pink marketplace; the impact
of COVID-19 on the global economy, our associates, our customers and our
operations, our high level of indebtedness and the availability and cost of
credit; high interest rates that increase the Company's borrowing costs or
volatility in the financial markets that could constrain liquidity and credit
availability; the inability to achieve savings and profit improvements at
targeted levels in the Company's operations or within the intended time periods;
increased competition from foreign suppliers endeavoring to sell glass
tableware, ceramic dinnerware and metalware in our core markets; global economic
conditions and the related impact on consumer spending levels; major slowdowns
or changes in trends in the retail, travel, restaurant and bar or entertainment
industries, and in the retail and foodservice channels of distribution
generally, that impact demand for our products; inability to meet the demand for
new products; material restructuring charges related to involuntary employee
terminations, facility sales or closures, or other various restructuring
activities; significant increases in per-unit costs for natural gas,
electricity, freight, corrugated packaging, and other purchased materials; our
ability to borrow under the Company's DIP financing arrangements; protracted
work stoppages related to collective bargaining agreements; increased pension
expense associated with lower returns on pension investments and increased
pension obligations; increased tax expense resulting from changes to tax laws,
regulations and evolving interpretations thereof; devaluations and other major
currency fluctuations relative to the U.S. dollar and the euro that could reduce
the cost competitiveness of the Company's products compared to foreign
competition; the effect of exchange rate changes to the value of the euro, the
Mexican peso, the Chinese renminbi and the Canadian dollar and the earnings and
cash flows of our international operations, expressed under U.S. GAAP; the
effect of high levels of inflation in countries in which we operate or sell our
products; the failure of our investments in e-commerce, new technology and other
capital expenditures to yield expected returns; failure to prevent unauthorized
access, security breaches and cyber-attacks to our information technology
systems; compliance with, or the failure to comply with, legal requirements
relating to health, safety and environmental protection; our failure to protect
our intellectual property; and the inability to effectively integrate future
business we acquire or joint ventures into which we enter. These and other risk
factors that could cause results to differ materially from the forward-looking
statements can be found in the Company's Annual Report on Form 10-K, the
Company's Quarterly Reports on Form 10-Q, the Company's other filings with the
SEC and in the Disclosure Statement filed with the Bankruptcy Court in
connection with the Chapter 11 Cases. Refer to the Company's most recent SEC
filings for any updates concerning these and other risks and uncertainties that
may affect the Company's operations and performance. Any forward-looking
statements speak only as of the date of this Current Report on Form 8-K, and the
Company assumes no obligation to update or revise any forward-looking statement
to reflect events or circumstances arising after the date of this report.
Item 9.01 Financial Statements and Exhibits.
d) Exhibits:
Exhibit No. Description
10.1 Assignment and Assumption Agreement, dated
November 5, 2020, by and between Libbey Inc. and Libbey Glass Inc.
10.2 Contribution and Exchange Agreement, dated November
5, 2020, by and between Libbey Inc. and Libbey Holdings Inc.
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