Truvo Group Wins Reorganization Plan Confirmation, Enabling Cross-Border Restructuring of $1.9 Billion of Debt

October 26, 2010

Cleary Gottlieb won the confirmation of the reorganization plan of Truvo Group’s U.S. holding companies, less than four months after the Chapter 11 cases were commenced in the United States Bankruptcy Court for the Southern District of New York. The October 26 ruling cleared the way for the Truvo Group to consummate a restructuring of approximately $1.9 billion of debt of U.S. and European members of the Truvo Group. The plan became effective on November 30, 2010.

The plan relies on a novel use of an intercreditor agreement’s enforcement sale provisions to release European subsidiaries that are not Chapter 11 debtors, enabling the European subsidiaries to avoid the adverse impact of a formal European proceeding. Initially the reorganization plan was supported by senior lenders but faced opposition from an official committee of junior creditors. Ultimately, these disputes were resolved and the plan was overwhelmingly supported by all creditor classes entitled to vote. The restructuring involved intense cooperation between lawyers located in New York, Brussels and London.