Successful Out-of-Court Restructuring
Our attorneys represented Liberty Tire Recycling Holdco LLC and its affiliates in its successful out-of-court restructuring. Liberty is North America’s premier provider of tire recycling services, with headquarters in Pittsburgh, PA and facilities throughout the US and Canada. Liberty recycles a third of the scrap tires in the US, or over 141 million tires annually, and reclaims about 1.6 billion pounds of rubber for innovative eco-friendly products.
The restructuring was completed through the refinancing of Liberty’s existing senior secured credit facility with approximately $90 million of term loans and a $24 million revolving credit facility and an offer to exchange Liberty’s $225 million of existing senior notes for $175 million of new second-lien PIK notes and substantially all of the equity of restructured Liberty concurrent with a consent solicitation to remove substantially all restrictive covenants contained in the indenture governing any of the senior notes not exchanged. The transaction was notable because the exchange offer and consent solicitation were completed in only seven days, with 99 percent of the noteholders participating. In addition, the transaction featured a unique “plan toggle” that would have enabled Liberty to convert the proposed out-of-court restructuring to a prepackaged Chapter 11 case in the US, with a parallel proceeding in Canada, had the exchange offer not garnered the required level of support from the noteholders.
The M&A Advisor selected this matter as its Out-of-Court Restructuring Deal of the Year (under $500 MM). The honor is part of the publication’s tenth annual M&A Advisor Turnaround Awards.
The team consisted of a multidisciplinary group of attorneys from various practices across the firm including partners Mel Cherney, Chris Peterson (Corporate), Sheryl Gittlitz (Finance), Michael Solow, Tyler Nurnberg (Bankruptcy & Restructuring) and Laurie Abramowitz (Tax); William Lonergan (Corporate) and Irv Hepner (Real Estate); and associates Roxanne Mintz, Anna Smith, Katy Benitez (Finance), Shay Soltani, Tyler Conway, Chris Konieczny (Corporate), Seth Kleinman, Jason Ben, Elise Neveau (Bankruptcy & Restructuring) and Sarah Soloveichik (Tax).