We advised the ad hoc lender group that negotiated and backstopped the restructuring

Davis Polk advised an ad hoc group of lenders in connection with the partially prepackaged chapter 11 restructuring and recapitalization of Monitronics International, Inc. (together with its subsidiaries, “Monitronics”). The ad hoc lender group negotiated the terms of the restructuring, which reduced the company’s leverage by approximately $500 million, and entered into a restructuring support agreement with the company and certain of its key shareholders on April 18, 2023. Monitronics commenced solicitation of votes on the plan on May 9, 2023 and filed its chapter 11 cases in the United States Bankruptcy Court for the Southern District of Texas on May 15, 2023.

In connection with the restructuring, Monitronics’s prepetition first-out credit facilities were paid in full with the proceeds of a debtor-in-possession financing facility backstopped by the ad hoc lender group and holders of the company’s prepetition second-out credit facility received a combination of new equity, debt and rights to participate in a new term loan facility financing and equity rights offering under the plan.

The restructuring and plan of reorganization received nearly unanimous support. Of those who voted on the plan, 100% of Montronics’s prepetition lenders and holders of approximately 99.9% of its prepetition equity interests voted in favor of the plan. Monitronics received confirmation of its plan following an uncontested hearing on June 26, 2023 and it emerged from chapter 11 on June 30, 2023. The debt and equity rights offerings were fully subscribed and the ad hoc lender group emerged with a controlling stake in the equity.

Monitronics is one of the largest home security and alarm monitoring companies in North America. Headquartered in the Dallas-Fort Worth area, Monitronics provides platinum-grade protection to over 800,000 residential and commercial customers through highly responsive, simple security solutions backed by expertly trained professionals. The company has one of the nation’s largest networks of independent authorized dealers and agents, providing products and support to customers in the United States and Puerto Rico, as well as professionally installed products.

The Davis Polk restructuring team included partners Brian M. Resnick and David Schiff and associates Stephanie Massman, Jinhe Hu and Paavani Garg. The finance team included partner Kenneth J. Steinberg and associate Roxanne Walton. The capital markets team included partner Emily Roberts and associate Sarah Catherine Chouinard. The tax team included partner Patrick E. Sigmon and associate Liang Zhang. The mergers and acquisitions team included partner Lee Hochbaum and associate Alex S. Burger. Members of the Davis Polk team are based in the New York, Northern California and London offices.