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April 2006 Archived Information



(4/28/06)  The Boyds Collection, Ltd. Receives Court Approval of Disclosure Statement
Company's Reorganization Plan Remains on Schedule

Gettysburg, PA - April 27, 2006 - The Boyds Collection, Ltd., a leading designer and manufacturer of unique, whimsical and "Folksy With Attitude(SM)" gifts and collectibles, today received approval of the Disclosure Statement relating to the proposed Plan of Reorganization. The approval from the United States Bankruptcy Court for the District of Maryland allows Boyds to begin the process of soliciting approval for the proposed Plan from its creditors and equity interest holders.

Boyds is pleased to report that the proposed Plan has the support of both its largest secured lender and the Official Committee of Unsecured Creditors in its Chapter 11 cases. The court has scheduled a confirmation hearing with respect to the Plan for June 8, 2006. With today's actions, Boyds will be on track to emerge from Chapter 11 in June.

"Today's court approval begins the process of emerging from Chapter 11 with both strong financial and operational performance," said Jan Murley, Chief Executive Officer and Director. "Since we began the restructuring process the dedication and hard work of our employees has been critical to our success, and is a strong indication of how well positioned we are to successfully move forward," Murley added.

A summary of the terms of the proposed Plan are as follows:
- Holders of Senior Secured Claims will receive for their claims of approximately $57.7 million: senior secured promissory notes in the aggregate principal amount of $30.0 million, to be due in five years following the Effective Date; and New Common Stock representing approximately 48.5% of the New Common Stock issued on the Effective Date.

- Each holder of an Allowed Qualifying Noteholder Claim shall receive Cash in the amount of 22.0% of the Allowed amount of such Allowed Qualifying Noteholder Claim, to be paid on the date upon which a Future Transaction (if any) is consummated; plus, on the Effective Date, its Pro Rata Share of 5.0% of the New Common Stock, plus, its Pro Rata Share of 50.0% of the Reallocated Shares.

- Each holder of an Allowed Non-Qualifying Noteholder Claim shall receive Cash in the amount of 24.0% of the Allowed amount of such Allowed Non-Qualifying Noteholder Claim to be paid on the date upon which a Future Transaction (if any) is consummated.

- Each holder of an Allowed General Unsecured Claim or Claims will receive Cash equal to 28% of its Allowed General Unsecured Claim or Claims, if the Class accepts the Plan.

- Secured Claims other than those of the Senior Secured Claims ("Miscellaneous Secured Claims") will be treated either as agreed by the parties or in a manner that reinstates the Secured Claim or provides for payment to the creditor equal to the value of such creditor's collateral.

- Each holder of an Allowed Other Priority Claim shall receive, on account of and in full and complete settlement, release and discharge of such Allowed Other Priority Claim, (a) Cash equal to the amount of such Allowed Other Priority Claim or (b) such other treatment as to which the Reorganized Debtors and such holder shall have agreed upon in writing in an amount sufficient to render such Allowed Priority Claim not Impaired under section 1124 of the Bankruptcy Code, to be paid on the latest of (a) the Effective Date (or as soon thereafter as is reasonably practicable), (b) five Business Days after the Allowance Date for such Other Priority Claim, or (c) the date on which the Debtors and the holder of such Allowed Other Priority Claim otherwise agree.

- Allowed Priority Tax Claims will either be paid, at the sole option of the Debtors, (a) on the latter of (i) the Effective Date (or as soon thereafter as is reasonably practicable), (ii) five Business Days after the Allowance Date with respect to such Allowed Priority Tax Claim; (b) beginning the first anniversary following the Effective Date, Cash payments to be made in equal annual installments, with the final installment being payable no later than the sixth anniversary of the date of the assessment of such Allowed Priority Tax Claim, in an aggregate amount equal to such Allowed Priority Tax Claim, together with interest on the unpaid balance of such claim calculated from the Effective Date through the date of payment at the Applicable Rate; or (c) such other treatment agreed to by the holder of such Allowed Priority Tax Claim and the Debtors.

- Each holder of an equity interest in Boyds of over 200 shares will receive its pro rata share of 46.5% of the equity of Reorganized Boyds.

- Each holder of an equity interest in Boyds of less than 200 shares will receive $0.15 per share held by such holder.

- The Company is also negotiating with one of its Senior Lenders to provide a new $11.0 million revolver with a $4.0 million seasonal over-advance option that supports letters of credit and would provide Boyds with access to additional capital to fund post-reorganization operations.


In connection with the development of the proposed Plan, Boyds has been represented by Houlihan Lokey Howard & Zukin Capital, Inc. as financial advisors and Kirkland & Ellis LLP as legal advisors. The Official Committee of Unsecured Creditors have been represented by as FTI Consulting as financial advisors and by Paul Weiss Rifkand, Wharton and Garrison LLP as legal advisors.



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