Rayovac 2009 Annual Report Download - page 145

Table of Contents
Index to Financial Statements SPECTRUM BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
Since the Petition Date, and in accordance with ASC 852, the Company ceased accruing interest on its senior subordinated notes, as such debt and
interest would be an allowed claim by the Bankruptcy Court. The Predecessor Company’s contractual interest on the Senior Subordinated Notes in excess of
reported interest was approximately $55,654 for the eleven month period ended August 30, 2009.
Liabilities subject to compromise as of August 30, 2009 for the Predecessor Company were as follows:
August 30,
2009
Senior Subordinated Notes $ 1,049,885
Accrued interest on Senior Subordinated Notes 40,497
Other accrued liabilities 15,580(A)
Predecessor Company Balance $ 1,105,962
Effects of Plan (1,105,962)
Successor Company Balance $ —
(A) As discussed below in the four column consolidated statement of financial position as of August 30, 2009 “Effects of Plan Adjustments,” note (f), the
$15,500 relates to rejected lease obligations that are to be paid by the Successor Company in subsequent periods.
Reorganization Items
In accordance with ASC 852, Reorganization items expense (income), net, are presented separately in the accompanying Consolidated Statements of
Operations and represent expenses, income, gains and losses that the Company has identified as directly relating to the Bankruptcy Cases. As required by
ASC 852, the Company recorded the pre−petition debt instruments at the allowed claim amount as defined in the Proposed Plan. Accordingly, the
Predecessor Company accelerated the amortization of the deferred debt issuance costs associated with the Senior Subordinated Notes and recorded a
non−cash charge of $10,668 during the second quarter ended March 29, 2009 to Reorganization items expense (income), net. Reorganization items expense
(income), net, for the eleven month period ended August 30, 2009 are summarized as follows:
Successor Company Predecessor Company
One Month
Ended
September 30, 2009
Eleven Months
Ended
August 30, 2009
Legal and professional fees $ 3,962 $ 74,624
Deferred financing costs — 10,668
Provision for rejected leases — 6,020
Administrative related reorganization items $ 3,962 $ 91,312
Gain on cancellation of debt — (146,555)
Fresh−start reporting adjustments — (1,087,566)
Reorganization items expense (income), net $ 3,962 $ (1,142,809)
Fresh−Start Reporting
The Company, in accordance with ASC 852, adopted fresh−start reporting as of the close of business on August 30, 2009 since the reorganization
value of the assets of Predecessor Company immediately before the date
142