Old PSG Wind-down Ltd., formerly Performance Sports Group Ltd., announced that the United States Bankruptcy Court for the District of Delaware has approved the first amended joint Chapter 11 plan of liquidation.
In February 2017, private investors bought Performance Sports Group out of bankruptcy for $575 million in February.
The plan was filed by the company and its affiliated debtors on October 31, 2017, as supplemented by the plan supplement filed by the debtors on December 5, 2017. The debtors also received a companion distribution and approval order approving the plan from the Ontario Superior Court of Justice (Commercial List) under the Companies’ Creditors Arrangement Act. A joint hearing before the Bankruptcy Court and the Canadian Court to confirm the Plan and obtain the CCAA Approval Order took place on December 20, 2017 and the plan became effective on December 21, 2017.
The plan is based on a global settlement among the debtors and their stakeholders that, among other things, provides for payment to the debtors’ creditors in the full amount of their allowed claims, without interest, and the distribution of the debtors’ remaining assets to beneficial holders of Allowed Parent Equity Interests (as defined in the Plan), subject to the cash distributions pursuant to the settlement that provides for distributions to the Plumbers & Pipefitters National Pension Fund, in its capacity as court-appointed lead plaintiff in the securities class action litigation styled as Nieves v. Performance Sports Group Ltd., et al., Case No. 1:16-CV-3591-GHW (S.D.N.Y.) on behalf of itself and a putative class of plaintiffs. The debtors’ assets comprise cash proceeds from the going concern sale of substantially all of their assets, the closing of which was announced on February 28, 2017, as well as claims relating to potential causes of action.
As of the date hereof, 45,925,640 common shares of the company are issued and outstanding. No additional Common Shares will be issued in satisfaction of claims, and as described in more detail below, a certain number of Common Shares will be mandatorily purchased and cancelled in exchange for the issuance of Beneficial Trust Interests based on elections made by certain holders of Allowed Parent Equity Interests in accordance with, and pursuant to, the Plan.
As a result of the Plan becoming effective, beneficial holders of Allowed Parent Equity Interests who elect to have such interests mandatorily purchased and cancelled, will receive Beneficial Trust Interests in exchange therefor. For beneficial holders of Allowed Parent Equity Interests who did not elect to have their Allowed Parent Equity Interests mandatorily purchased and cancelled in exchange for Beneficial Trust Interests, the issued and outstanding common shares of the company held by such holders will be subject to restrictions on transfer in accordance with the Plan and pursuant to the amended and restated articles approved by the Bankruptcy Court and Canadian Court.
As soon as possible after the Plan goes effective, certain of the company’s assets will be transferred to a liquidating trust established for the benefit of the holders of the Beneficial Trust Interests pursuant to the Plan and liquidating trust agreement. These assets include claims relating to potential causes of action, as well as certain cash reserves to fund the liquidating trust and wind down of the debtors’ estates. Theseus Strategy Group LLC has been appointed as the liquidation trustee and Mark E. Palmer of Theseus Strategy Group LLC has been appointed as Chief Wind-Down Officer for the purpose of liquidating and distributing all of the company’s remaining assets in accordance with the terms of the plan.
In accordance with the plan and upon it becoming effective, the current members of the board of directors of the company will each step down from the Board and a new slate of members selected by the Equity Committee are expected to serve as directors through to the liquidation of the debtors’ assets.
In February, Performance Sports Group Ltd. sold substantially all of the assets of the company and its North American subsidiaries, including its European and global operations, to an acquisition vehicle co-owned by affiliates of Sagard Holdings Inc. and Fairfax Financial Holdings Ltd. The successor company is called Peak Achievement Athletics. Edward G. Kinnaly was appointed CEO of the Bauer, Cascade and Maverik businesses. Easton Diamond Sports has been repositioned to be operated on an independent decentralized basis and is being led by Tony Palma.
The company intends to file a Form 15 with the Securities and Exchange Commission and take other actions as necessary to terminate the registration under the Securities Exchange Act of 1934, as amended of its common shares and suspend all reporting obligations under Section 13 and Section 15(d) of the Exchange Act. Upon filing a Form 15, the company will immediately cease filing any further periodic or current reports under the Exchange Act.
The plan, including the plan Supplement and related materials, is available on cases.primeclerk.com/PSG and ey.com/ca/psg.
Photo courtesy Bauer
