Orleans Homebuilders, Inc. (the “Company”, or “Orleans”) (Pink Sheets: OHBIQ.PK) and certain affiliated debtors today reported that the United States Bankruptcy Court for the District of Delaware has confirmed the company’s Modified Second Amended Joint Plan of Reorganization (the “Plan”).
The Plan is expected to become effective by year end, at which time Orleans will emerge from Chapter 11 protection. Distributions will be made after that time in accordance with the Plan to satisfy creditor claims.
“We have reached an important milestone that signals Orleans will be ready to emerge from Chapter 11 protection with strong operations and less than half of the debt the company had just nine months ago,” states Mitchell B. Arden, Senior Managing Director and Shareholder of Phoenix Management, who has been serving as the Company’s Chief Restructuring Officer. “The success of Orleans’ reorganization is a testament to the hard work of our employees who have continued to build and sell Orleans homes, the support of our customers who recognize the value and quality of an Orleans home, the support of our Plan sponsors, who have shared the vision of Orleans’ management team, and the around-the-clock effort and responsiveness of the Company’s counsel at Cahill Gordon & Reindel LLP. Of course, this could not have been achieved without the continuing support of our vendors and contractors, the vast majority of whom have stayed with us since the filing took place.”
Orleans is launching the syndication of its anticipated exit financing package of approximately $155 million, which consists of a $30 million revolving credit facility and $125 million syndicated term loan. Orleans has entered into a commitment letter for JPMorgan Chase Bank, N.A. to provide the revolving credit facility, and for JP Morgan Securities LLC to act as sole lead arranger and bookrunner for the syndication of the term loan. Orleans anticipates that the new financing, which remains subject to the negotiation and execution of definitive documentation, will satisfy the outstanding amounts under the debtor-in-possession financing facilities and certain other allowed claims, fund emergence-related disbursements, and provide for the working capital needs of Orleans after emergence from Chapter 11 protection.
The Company and most of its operating subsidiaries filed voluntary petitions to commence the Chapter 11 process on March 1, 2010. The filing did not include certain of the Company’s subsidiaries, including its mortgage services subsidiary, Alambry Funding Inc., which provides mortgage brokerage services for customers and financial institutions, but does not underwrite any customer mortgages.
Information about the reorganization, including copies of the Plan, the Court Order confirming the Plan, the Order approving the agreement related to the exit financing, and links to other Court filings can be found at www.OrleansHomesREOrg.com.