E-II Holdings Gains Approval For Reorganization Plan
NEW YORK (AP) _ E-II Holdings Inc., which last week rejected a $1.18 billion cash buyout offer from investor Carl C. Icahn, said late Tuesday that a U.S. bankruptcy court had approved its modified reorganiztion plan.
The company, which owns Culligan water purification systems, Samsonite luggage and the maker of Botany 500 men’s suits, said the court had overruled Icahn’s objections to the plan, which will boost payments to bondholders to as much as $358.65 million.
The plan would allow creditors to fully recover their claims through the issue of new debt, cash distributions and options to purchase new E-II stock.
The reorganization would leave E-II with an equity value of between $255 million and $332 million, the company said in a statement. E-II changed its plan after its financial adviser, Bear, Stearns & Co., revised upward its estimates of the company’s liquidation and reoganization value.
Two weeks ago, Icahn, who acquired 31.4 percent of the company’s junion- level debt last year, stepped up a bid for control of E-II. The company rejected his offer, saying creditors would receive more from its reorganization plan than under Icahn’s all-cash offer to buy the company.
In rejecting the bid last Thursday, E-II said Icahn’s proposal did not have firm financing and faced other legal problems.
Icahn contended that the E-II reorganization plan assigned an artifically low value to the company.
He also said that amending the plan ″at the very last moment″ was unfair to creditors, some of whom might not have learned of changes before Monday’s hearing before the U.S. Bankruptcy Court for the Southern District of New York.