On January 10, 2017, in the case of In re: Roust Corporation, et. al., (1623786 ) (RDD), pending in the U.S. Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), Judge Robert D. Drain entered an order confirming the debtors’ prepackaged chapter 11 plan of reorganization less than two weeks after the commencement date. More specifically, the confirmation order was entered eleven days after the debtors commenced their chapter 11 cases in a bankruptcy proceeding where the confirmation hearing was held a mere seven days into the cases. Judge Drain confirmed the plan over a number of objections, including an objection from the U.S. Trustee’s Office regarding, among other things, the pace of the chapter 11 cases. At the confirmation hearing, Judge Drain found that, under the particular circumstances of the debtors’ chapter 11 cases, the plan solicitation was proper and the extremely short amount of time between the petition date and plan confirmation was justified.
Background -
Roust Corporation and certain of its subsidiaries (“Roust”), one of the world’s largest vodka producers, were overleveraged on account of approximately $488 million in principal amount of senior secured notes and $279 million in principal amount of senior convertible PIK notes. Roust entered into discussions with its equity sponsor and informal groups of its funded debt stakeholders.
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