Rayovac 2009 Annual Report Download - page 44

Table of Contents
Index to Financial Statements
Confirmation Order pending appeal in the District Court in the United States District Court for the Western District of Texas (“District Court”) (Case
No. 09−CV−0576). On July 23, 2009, the District Court concluded that the Equity Committee had not carried its burden of proof and denied the Stay
Motion (“Order Denying Stay”). On July 27, 2009, the Equity Committee filed in the United States Court of Appeals for the Fifth Circuit (“Fifth Circuit”)
an emergency motion for an expedited appeal of the Order Denying Stay and an emergency motion for stay pending appeal. The Fifth Circuit denied the
Equity Committee’s emergency motion for stay pending appeal on August 19, 2009. Because the District Court and the Fifth Circuit denied the stay motions
pending before them, the Plan became effective on August 28, 2009 (the “Effective Date”). After the Effective Date, the Equity Committee moved to
withdraw its appeal of the Order Denying Stay in the Fifth Circuit. The Fifth Circuit entered an order dismissing the appeal on September 11, 2009. On
September 21, 2009, the Equity Committee moved to withdraw its appeal of the Confirmation Order. The District Court granted the motion on
September 23, 2009 and dismissed the Equity Committee’s appeal without prejudice.
With the exception of Spectrum Jungle Labs Corporation, the related cases of the reorganized debtors were closed as of September 30, 2009.
Plan Effective Date
On the Effective Date the Plan became effective, and the Debtors emerged from Chapter 11 of the Bankruptcy Code. Pursuant to and by operation of
the Plan, on the Effective Date, all of Old Spectrum’s existing equity securities, including the existing common stock and stock options, were extinguished
and deemed cancelled. Reorganized Spectrum Brands, Inc. filed a certificate of incorporation authorizing new shares of common stock. Pursuant to and in
accordance with the Plan, on the Effective Date, reorganized Spectrum Brands, Inc. issued a total of 27,030,000 shares of common stock and $218 million
in aggregate principal amount of 12% Senior Subordinated Toggle Notes due 2019 (the “12% Notes”) to holders of allowed claims with respect to Old
Spectrum’s 8 1/2% Senior Subordinated Notes due 2013 (the “8 1/2 Notes”), 7 3/8% Senior Subordinated Notes due 2015 (the “7 3/8 Notes”) and Variable
Rate Toggle Senior Subordinated Notes due 2013 (the “Variable Rate Notes”) (collectively, the “Senior Subordinated Notes”). Also on the Effective Date,
reorganized Spectrum Brands, Inc. issued a total of 2,970,000 shares of common stock to supplemental and sub−supplemental debtor−in−possession facility
participants in respect of the equity fee earned under the Debtors’ debtor−in−possession credit facility. The common stock is currently quoted on the OTC
Bulletin Board and the Pink Sheet Electronic Quotation Service. However, there can be no assurances that a broker−dealer will make a market in the
common stock.
On the Effective Date, pursuant to the Plan (as amended pursuant to the Settlement), we entered into Amendment No. 1 to the senior secured term
credit facility agreement reflecting the terms of the Settlement as authorized by the Confirmation Order, including a new covenant restricting the Company
from paying cash interest on the 12% Notes until the date that is 18 months from the Effective Date, or February 28, 2011. In addition, on the Effective
Date, we entered into Amendment No. 2 to the senior secured term credit facility agreement to give effect to certain technical amendments to the senior
secured term credit facility agreement. For a further discussion of the amendments see “Debt Financing Activities—Senior Term Credit Facility.”
In order to consummate the Plan, the Debtors also obtained a $242 million asset−based exit loan facility pursuant to a credit agreement among the
Debtors, General Electric Capital Corporation, as the administrative agent, co−collateral agent, swingline lender and supplemental loan lender, Bank of
America, N.A., as co−collateral agent and L/C Issuer, RBS Asset Finance, Inc., through its division RBS Business Capital, as syndication agent and the
lenders party thereto.
Internal Restructuring Transactions
The Plan contemplated that on, as of, or after the Effective Date, with the consent of its board of directors, each of the reorganized Debtors may take
such actions as may be necessary or appropriate to effect a corporate or operational restructuring of their respective business, to otherwise simplify the
overall corporate or operational
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