CARBO CERAMICS INC. Item 1.01Entry into a Material Definitive Agreement.
On
On
The Debtors expect that the effective date of the Plan (the "Effective Date")
will occur as soon as all conditions precedent to the Effective Date provided in
the Plan have been satisfied. The Debtors currently expect that the Effective
Date will occur on or about
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 can be accessed via PACER at https://www.pacer.gov, by visiting http://dm.epiq11.com/Carbo or by calling 1-866-897-6433 (Toll Free) or 1-646-282-2500 (International), and incorporated by reference herein. All capitalized terms used herein but not otherwise defined in this Current Report on Form 8-K (this "Current Report") or as otherwise indicated have the meanings set forth in the Plan.
The Plan of Reorganization and Treatment of Clams and Interests
Among other things and subject to the terms and conditions set forth in the Plan, on or immediately prior to the Effective Date (unless otherwise indicated), the Plan provides for the consummation of certain transactions, and the treatment of certain claims and interests with respect to the Debtors, as follows:
• the equity interests in CARBO outstanding immediately prior to the
Effective Date will be cancelled, released, discharged and extinguished
and holders of such interests will receive no distribution under the
Plan;
• new organizational documents (the "New Organizational Documents") of a
reorganized CARBO entity ("Reorganized CARBO") will be adopted, and each
of the Supporting Lenders will receive its pro rata share of 100% of the
equity interests in Reorganized CARBO in exchange for such Supporting
Lender's secured claims under the Credit Agreement
• the DIP Facility claims of each DIP Lender will be converted into
borrowings under a new senior secured term loan exit credit facility with
Reorganized CARBO;
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• the equity interests in Asset Guard and StrataGen outstanding immediately
prior to the Effective Date will be converted automatically into the
equity interests in a reorganized Asset Guard entity ("Reorganized Asset
Guard") and a reorganized StrataGen entity ("Reorganized StrataGen," and
together with Reorganized CARBO and Reorganized Asset Guard, the
"Reorganized Debtors"), respectively, and Reorganized CARBO will retain
100% of such equity interests in Reorganized Asset Guard and Reorganized
StrataGen ;
• a liquidating trust (the "Liquidating Trust") will be established for the
benefit of holders of allowed general unsecured claims against the
Debtors ("Allowed General Unsecured Claims"), and beneficial interests in
the Liquidating Trust will be distributed to such holders on account of
their respective Allowed General Unsecured Claims;
• the Supporting Lenders will contribute or cause to be contributed to the
Liquidating Trust cash in the amount of (i) $100,000 to fund the costs of
administering the Liquidating Trust , (ii) $500,000 to fund distributions
to the holders of Allowed General Unsecured Claims against CARBO and
(iii) $1,500,000 , or such lesser or higher amount as is necessary to
render unimpaired all Allowed General Unsecured Claims against AssetGuard
and StrataGen ; and
• Reorganized CARBO will contribute to the Liquidating Trust (i) certain
causes of action that are not otherwise released under the Plan and (ii)
a promissory note that matures and provides for payment of principal and
accrued interest on December 31, 2021 in a principal amount equal to
$5,500,000 , minus the allowed amount of the Committee's Professional Fee
Claims determined by one or more final orders of the Bankruptcy Court ,
which Professional Fee Claims will be paid in cash out of such amount.
Cautionary Note Regarding Forward-Looking Statements
This Current Report contains "forward-looking statements" within the meaning of
the safe harbor provisions of Section 27A of the Securities Act and Section 21E
of the Exchange Act. Forward-looking statements are not statements of historical
facts and often contain words such as "may," "will," "expect," "believe,"
"anticipate," "plan," "estimate," "seek," "could," "should," "intend,"
"potential," or words of similar meaning. Forward-looking statements are based
on management's current expectations, beliefs, assumptions and estimates
regarding CARBO, industry, economic conditions, government regulations and
energy policies and other factors. Forward-looking statements may include, for
example, statements regarding the Chapter 11 Cases, CARBO's ability to complete
the Restructuring and its expectations regarding the occurrence of the Effective
Date. These statements are subject to significant risks, uncertainties, and
assumptions that are difficult to predict and could cause actual results to
differ materially and adversely from those expressed or implied in the
forward-looking statements, including risks and uncertainties regarding CARBO's
ability to successfully complete a reorganization process under Chapter 11,
objections or other pleadings filed that could protract the Chapter 11 Cases,
and the outcome of the Chapter 11 Cases generally; potential delays in the
Chapter 11 process due to the effects of the COVID-19 virus; and other
litigation and inherent risks involved in a bankruptcy process. Forward-looking
statements are also subject to the risk factors and cautionary language
described from time to time in the reports and registration statements CARBO
files with the
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