Mon 11/08/2021 14:45 PM
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Relevant Document:
Voluntary Petition

As expected, Houston-based ORG GC Midco LLC, a non-operating intermediate holding company whose primary revenue source is derived from its second-tier subsidiary and operating company, GC Services, which provides business process outsourcing services in the United States, filed for chapter 11 protection today in the Bankruptcy Court for the Southern District of Texas. The company reports $100 million to $500 million in both assets and liabilities. The debtor is represented by Weil, Gotshal & Manges as counsel and Riveron Management Services (formerly known as Conway MacKenzie Management Services) as interim management services provider, with Riveron's Robert Wagstaff serving as CRO. The case number is 21-90015.

Resolutions attached to the petition disclose an RSA with existing term lenders on the terms of a prepackaged plan of reorganization, for which solicitation commenced prepetition on Oct. 16, with a voting deadline of Nov. 1. According to the petition, 100% of existing term lenders voted to accept the plan. A copy of the prepackaged plan and disclosure statement can be found on the website of the debtor’s claims agent, Stretto. ORG GC Midco “is the only anticipated debtor in the Chapter 11 Case,” the DS says, adding that “none of Midco’s subsidiaries (collectively, the ‘Non-Debtor GCS Parties’), including the Company’s primary operating entity, GC Services, contemplate filing for chapter 11 protection.”

The petition also notes a $6 million DIP term loan facility with Goldman Sachs Specialty Lending Group, L.P. as administrative agent. The DS adds that the company’s “Existing ABL Lenders have agreed to allow GC Services to continue to access the Existing ABL Facility during the pendency of the Chapter 11 Case.”

The debtor’s prepetition capital structure includes:


According to the DS, the company contemplates a restructuring of “the Company’s funded indebtedness through a prepackaged plan of reorganization that will substantially de-lever the Company by reducing its funded indebtedness from approximately $210.3 million to approximately $130.5 million [including notional size $30 million exit ABL facility, which may be increased to $40 million subject to ongoing negotiations] upon emergence,” as follows:

The company’s corporate organizational structure is shown below:

Though the company says its business is operationally sound, ORG is “significantly over-levered,” according to the disclosure statement. For fiscal 2020, the company reported approximately $15 million of adjusted EBITDA (on a consolidated 52-week basis) versus approximately $218 million of total funded debt, including accrued and unpaid interest—implying leverage of approximately 14.5x EBITDA, the disclosure statement follows.

Reorg First Day will provide a full summary once the first day briefing is complete.
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