Item 1.03 Bankruptcy or Receivership
On
The Company intends to continue to operate its businesses in the ordinary course
during the pendency of the Chapter 11 Cases. To ensure continuation of ordinary
course operations, the Company filed motions with the
Additional information about the Chapter 11 Cases may be obtained by visiting Prime Clerk at https://cases.primeclerk.com/libbey.
DIP Term Loan Credit Facility
In connection with the Chapter 11 Cases, on the Petition Date, the Company filed
a motion (the "DIP Motion") seeking, among other things, approval of senior
secured debtor-in-possession financing on the terms and conditions set forth in
a proposed Superpriority Secured Debtor-in-Possession Credit Agreement (the "DIP
Term Loan Credit Agreement"), by and among the Company,
Subject to final documentation and the satisfaction of certain customary
conditions, including the approval of the
The interest rates for loans outstanding under the proposed DIP Term Loan
Facility will be, at the option of
Subject to the approval of the
The DIP Term Loan Credit Facility contains customary representations and warranties, affirmative and negative covenants, and events of default, and requires the Company Parties to timely comply with certain milestones relating to the Chapter 11 Cases.
The obligations under the DIP Term Loan Credit Facility are jointly and
severally guaranteed by the Guarantors and all of the obligations under such
facility are secured by substantially all of the assets of the Guarantors and
Item 2.04 Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
The filing of the Chapter 11 Cases described above in Item 1.03 constitutes an event of default that accelerated the Company Parties' obligations under the following debt instruments (the "Debt Instruments"):
? Amended and Restated Credit Agreement, dated as ofFebruary 8, 2010 (as amended, amended and restated or otherwise modified), amongLibbey Glass ,Libbey Europe B.V. , aNetherlands corporation, the Company, the other subsidiaries of the Company party thereto,JPMorgan Chase Bank, N.A ., as administrative agent with respect to theU.S. loans,J.P. Morgan Europe Limited , as administrative agent with respect tothe Netherlands loans, the other titled agents party thereto and the lenders party thereto from time to time (the "Prepetition ABL Lenders") (the "Prepetition ABL Credit Agreement"); ? Credit Agreement, dated as ofApril 9, 2014 (as amended, amended and restated or otherwise modified), amongLibbey Glass , the Company, the other subsidiaries of the Company party thereto, Cortland, as administrative agent (as successor toCitibank, N.A ., in its capacities as administrative agent and collateral agent), and the lenders party thereto from time to time (the "Prepetition Term Loan Credit Agreement").
The Debt Instruments provide that, as a result of the Chapter 11 Cases, the principal and accrued interest and other fees and obligations due thereunder shall be immediately due and payable. Any efforts to enforce such payment obligations under the Debt Instruments with respect to the Company Parties are automatically stayed as a result of the Chapter 11 Cases, and the creditors' right of enforcement in respect of the Debt Instruments against the Company Parties are subject to the applicable provisions of the Bankruptcy Code.
Contemporaneous with the filing of the Chapter 11 Cases on the Petition Date,
the Prepetition ABL Lenders and, among others, the ABL Borrowers, the other
Company Parties and the Guarantors organized under the laws of
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
As previously announced, on
Pursuant to the Amended Agreement,
? In the event that the Company terminatesMr. Bauer's employment for "Cause" orMr. Bauer voluntarily resigns without "Good Reason" (each as defined in the Amended Agreement) on or beforeJuly 3, 2020 ,Mr. Bauer will repay the full Retention Bonus; ? IfMr. Bauer voluntarily resigns without Good Reason or is terminated for Cause afterJuly 3, 2020 but beforeOctober 2, 2020 , or, if earlier, the effective date of the Company's plan of reorganization, then he will repay half the Retention Bonus; and ? If the Company does not achieve certain cash-flow milestones, tested twice, once as ofJuly 3, 2020 and the second time as of the earlier ofOctober 2, 2020 or the effective date of the Company's plan of reorganization, then Mr. Bauer will repay half the Retention Bonus for each cash-flow metric not met.
The above summary of the Amended Agreement is qualified in its entirety by reference to the complete terms and conditions as set forth in the Amended Agreement, a copy of which is filed herewith as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference into this Item 5.02.
Item 7.01 Regulation FD Disclosure
Press Release
In connection with the filing of the Chapter 11 Cases, the Company issued a
press release on
Cleansing Material
Prior to the filing of the Chapter 11 Cases, the Company commenced discussions with certain lenders under the Pre-Petition Term Loan Credit Agreement to facilitate discussions of a potential refinancing or restructuring transaction. The Company entered into confidentiality agreements (the "NDAs") with such lenders (the "NDA Parties") in connection therewith.
Pursuant to the terms of the NDAs, the Company agreed to publicly disclose certain confidential information regarding the Company that was provided to the NDA Parties (the "Cleansing Material"). A copy of the Cleansing Material is attached as Exhibit 99.2 to this Current Report on Form 8-K.
The Cleansing Material was prepared by the Company solely to facilitate a discussion with the parties to the NDAs and was not prepared with a view toward public disclosure and should not be relied upon to make an investment decision with respect to the Company. The Cleansing Material should not be regarded as an indication that the Company Parties or any third party consider the Cleansing Material to be a reliable prediction of future events, and the Cleansing Material should not be relied upon as such. The Cleansing Material includes certain values for illustrative purposes only and such values are not the result of, and do not represent, actual valuations, estimates, forecasts or projections of the Company Parties or any third party and should not be relied upon as such. Neither the Company Parties nor any third party has made or makes any representation to any person regarding the accuracy of any Cleansing Material or undertakes any obligation to publicly update the Cleansing Material to reflect circumstances existing after the date when the Cleansing Material was prepared or conveyed or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the Cleansing Material are shown to be in error.
The information furnished with this Item 7.01, including Exhibits 99.1 and 99.2, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 8.01 Other Events
The Company cautions that trading in its securities during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. The Company anticipates that its common stock will be delisted from the NYSE American following the filing of the Chapter 11 Cases and will subsequently trade on the OTC Bulletin Board or "pink sheets." Trading prices for the Company's securities may bear little or no relationship to the actual recovery, if any, by the holders of the Company's equity securities as a result of the Chapter 11 Cases. The Company expects that its equity holders will experience a complete loss on their investment, depending on the outcome of the Chapter 11 Cases.
--------------------------------------------------------------------------------
Cautionary Note on Forward-Looking Statements
This Current Report on Form 8-K includes forward-looking statements as defined
in Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act of 1934, as amended. Such statements reflect only Libbey's best assessment
at this time and are indicated by words or phrases such as "goal," "plan,"
"expects," "believes," "will," "estimates," "anticipates," or similar phrases.
These forward-looking statements include all matters that are not historical
facts. They include statements regarding the Company's intentions, beliefs or
current expectations concerning, among other things, the impact of COVID-19 on
our operations and the length of time of such impact, our results of operations,
financial condition, liquidity, prospects, growth, strategies and the impact of
COVID-19 on the industry in which we operate and the industries we serve. By
their nature, forward-looking statements involve risks and uncertainties because
they relate to events and depend on circumstances that may or may not occur in
the future. Investors are cautioned that forward-looking statements are not
guarantees of future performance and that our actual results of operations,
financial condition and liquidity, and the development of the industry in which
we operate, may differ materially from these statements. Investors should not
place undue reliance on such statements. Important factors potentially affecting
performance include but are not limited to risks and uncertainties related to
the ability to confirm and consummate a plan of reorganization; risks attendant
to the bankruptcy process, including our ability to obtain court approvals with
respect to motions filed in the Chapter 11 Cases, the outcomes of court rulings
and the Chapter 11 Cases in general and the length of time that we may be
required to operate in bankruptcy; the effectiveness of the overall
restructuring activities pursuant to the Chapter 11 Cases and any additional
strategies that we may employ to address our liquidity and capital resources;
the actions and decisions of creditors, regulators and other third parties that
have an interest in the Chapter 11 Cases, which may interfere with the ability
to confirm and consummate a plan of reorganization; restrictions on us due to
the terms of the proposed DIP Credit Agreements and restrictions imposed by the
applicable courts; potential delays in the Chapter 11 Cases due to the effects
of COVID-19; the effects of the Chapter 11 Cases on the Company and on the
interests of various constituents, including holders of the Company's common
stock; other litigation and inherent risks involved in a bankruptcy process; the
impact of COVID-19 on the global economy, our associates, our customers and our
operations, our high level of indebtedness and the availability and cost of
credit; high interest rates that increase the Company's borrowing costs or
volatility in the financial markets that could constrain liquidity and credit
availability; the inability to achieve savings and profit improvements at
targeted levels in the Company's operations or within the intended time periods;
increased competition from foreign suppliers endeavoring to sell glass
tableware, ceramic dinnerware and metalware in our core markets; global economic
conditions and the related impact on consumer spending levels; major slowdowns
or changes in trends in the retail, travel, restaurant and bar or entertainment
industries, and in the retail and foodservice channels of distribution
generally, that impact demand for our products; inability to meet the demand for
new products; material restructuring charges related to involuntary employee
terminations, facility sales or closures, or other various restructuring
activities; significant increases in per-unit costs for natural gas,
electricity, freight, corrugated packaging, and other purchased materials; our
ability to borrow under our ABL credit agreement; protracted work stoppages
related to collective bargaining agreements; increased pension expense
associated with lower returns on pension investments and increased pension
obligations; increased tax expense resulting from changes to tax laws,
regulations and evolving interpretations thereof; devaluations and other major
currency fluctuations relative to the
Item 9.01 Financial Statements and Exhibits
d) Exhibits: Exhibit No. Description Amended and Restated Retention Bonus Agreement, dated as ofMay 31, 2020 , by and between the Company and Michael P. 10.1 Bauer 99.1 Press release datedJune 1, 2020 99.2 Cleansing Material
© Edgar Online, source