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Spectrum Brands Reorganization Plan Confirmed, Then Stayed

Posted: Thursday, July 16, 2009, 7:02 p.m., EDT

Spectrum Brands Reorganization Plan Confirmed, Then StayedThe United States Bankruptcy Court for the Western District of Texas confirmed Spectrum Brands Inc.’s reorganization plan on July 15, then stayed the confirmation order until July 27 following an appeal by the Official Committee of Equity Security Holders.

The committee represents Spectrum’s existing shareholders, who would see their investments wiped out by the plan, which would reissue new stock to debt holders in exchange for reduced debt. As of July 15, those debt holders would exchange more than $1.1 billion in debt for new notes with a face value of about $218 million and the balance in common stock.

Spectrum also expects the committee to appeal to the Federal District Court.

Barring a further stay, Spectrum would be able to implement the plan, which includes issuing 27,030,000 shares of new stock to the existing debt holders and 2,970,000 shares to its debtor-in-possession facility participants, primarily GE Capital. The plan authorizes the new Spectrum board to issue up to 150,000 million shares of stock, including about 15 million currently set aside in its officer and director incentive program.

As part of the plan, Spectrum would seat a 7-member board of directors, including CEO Kent Hussey and six new board members:

  1. Norman Matthews
  2. Kenneth Ambrecht
  3. Hugh Rovit
  4. Terry Polistina
  5. Marc Kirschner
  6. Eugene Davis

Polistina is president and CEO of Salton Inc. and a former Applica executive. Salton in May 2008 had agreed to acquire Spectrum’s United Pet Group unit in a $915 million deal that was nixed by Spectrum’s debt holders. <HOME>

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