After operating for almost one year under Chapter 11 as it worked its way through a prepackaged bankruptcy, Nebraska Book Co. won court approval Wednesday of a restructuring plan that eliminates about $270 million in debt.
NBC, the nation’s third largest operator of college bookstores as well as a distributor, filed for Chapter 11 last June and the process took longer to complete than originally expected. Its first plan collapsed after credit markets tightened and the company was unable to obtain $250 million in exit financing.
According to Bloomberg, under the new plan, senior secured noteholders owed about $200 million will get virtually all of the reorganized company’s equity, plus $100 million in new notes and the right to participate in an $80 million exit loan. The noteholders are projected to recoup about 81 cents on the dollar. Holders of 8.625% unsecured notes, owed about $179 million, will get warrants for 22% of the new equity, to recover about 3 cents on the dollar. Unsecured creditors, owed from $11 million to $14 million, will get a cash payment for a recovery of about 4%.
