Rayovac 2009 Annual Report Download - page 142

Table of Contents
Index to Financial Statements SPECTRUM BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
the market on December 22, 2008. The Predecessor Company was advised that the decision to suspend the Predecessor Company’s common stock was
reached in view of the fact that the Predecessor Company had recently fallen below the NYSE’s continued listing standard regarding average global market
capitalization over a consecutive 30 trading day period of not less than $25,000, the minimum threshold for listing on the NYSE. The Predecessor
Company’s common stock was delisted from the NYSE effective January 23, 2009.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “Codification” or “ASC”)
In June 2009, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 168, “The FASB Accounting Standards Codification and
the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162,” an accounting standard which established the
Codification to become the single source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities, with the exception of
guidance issued by the U.S. Securities and Exchange Commission (the “SEC”) and its staff. All guidance contained in the Codification carries an equal
level of authority. The Codification is not intended to change GAAP, but rather is expected to simplify accounting research by reorganizing current GAAP
into approximately 90 accounting topics. The Company adopted this accounting standard in preparing the accompanying Consolidated Financial Statements
for the period ended September 30, 2009. The adoption of this accounting standard, which was subsequently codified into ASC Topic 105: “Generally
Accepted Accounting Principles,” had no impact on retained earnings and will have no impact on our financial position, results of operations or cash flows.
(2) Voluntary Reorganization Under Chapter 11
On February 3, 2009, the Predecessor Company announced that it had reached agreements with certain noteholders, representing, in the aggregate,
approximately 70% of the face value of the Company’s then outstanding senior subordinated notes, to pursue a refinancing that, if implemented as
proposed, would significantly reduce the Predecessor Company’s outstanding debt. On the same day, the Debtors filed voluntary petitions under Chapter 11
of the Bankruptcy Code, in the Bankruptcy Court (the “Bankruptcy Filing”) and filed with the Bankruptcy Court a proposed plan of reorganization (the
“Proposed Plan”) that detailed the Debtors’ proposed terms for the refinancing. The Chapter 11 cases were jointly administered by the Bankruptcy Court as
Case No. 09−50455 (the “Bankruptcy Cases”).
Confirmation of the Proposed Plan
The Proposed Plan provided for, among other things, reinstatement of the Predecessor Company’s senior secured term credit facility under
Section 1124 of the Bankruptcy Code. The agent under the senior secured term credit facility on behalf of the senior secured term lenders had challenged
the Proposed Plan and alleged that the Proposed Plan did not leave the rights of the term lenders under the senior secured term credit facility unimpaired and
therefore did not reinstate the senior secured term credit facility claims without alteration. Amended versions of the original Proposed Plan were filed with
the Bankruptcy Court in advance of the hearing to consider confirmation of such plan.
The confirmation hearing commenced on June 15, 2009. At the confirmation hearing the agent under the senior secured term credit facility presented
its objection to the amended version of the Proposed Plan. Additional objections to such plan were presented by the Official Committee of Equity Security
Holders (the “Equity Committee”), which objections centered around assertions that the Proposed Plan, as amended, placed too low a valuation on the
reorganized Debtors.
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