School Specialty, Inc. announced the U.S. Bankruptcy Court for the District of Delaware issued an order preliminarily approving the company's Disclosure Statement and authorized the company to begin soliciting approval for its Amended Joint Plan of Reorganization (the Plan) from its creditor groups. Under the Plan, School Specialty will emerge from Chapter 11 as a stand-alone company.
School Specialty's President and CEO Michael P. Lavelle, said, "The Court's approval of the Disclosure Statement and authorization to begin the solicitation process for approval of our Plan of Reorganization are important steps toward successfully completing School Specialty's debt restructuring. We anticipate emerging from the Chapter 11 process having strengthened the financial position of our company for the long-term. During this process, we have continued building our strategic brands and product offerings, and will continue to provide our customers with a broad range of supplemental educational and instructional products and equipment to meet their needs."
A hearing at which the Court will be asked to confirm School Specialty's Plan has been scheduled for May 20, 2013. Assuming the requisite approvals are received and the Court confirms the Plan under the current proposed timetable, School Specialty expects to emerge from Chapter 11 by the end of May or early June.
Based on preliminary indications of interest, the Company currently believes that it will receive commitments for exit financing that will be used to partially repay lenders of the debtor-in-possession financing, outstanding claims per the Plan's distribution formulas, and fund ongoing operations within the current proposed timetable for emergence.
If the Company's Plan of Reorganization is confirmed as proposed, existing common stock will be extinguished under the Plan, and no distributions will be made to holders of the Company's current equity.
School Specialty is an education company that provides innovative and proprietary products, programs and services to help educators engage and inspire students of all ages and abilities to learn.