CTI Foods’ Chapter 11 Plan of Reorganization

Davis Polk advised an ad hoc group of lenders under a $347 million first-lien and a $140 million second-lien term loan credit facility of CTI Foods, LLC and certain of its subsidiaries (collectively, “CTI”) in CTI’s successful chapter 11 restructuring. On April 18, 2019 CTI’s plan of reorganization, which Davis Polk played a leading role in structuring and negotiation, was confirmed by the Bankruptcy Court for the District of Delaware and on May 3, 2019 the plan went effective and CTI emerged from bankruptcy. 100% of the creditors that voted on the plan supported it. Upon emergence, the prepetition secured term lenders equitized their loans in exchange for substantially all of the equity in reorganized CTI. 

In addition, Davis Polk advised Cortland Capital Market Services LLC as agent on a $75 million DIP term loan facility provided by certain first-lien and second-lien lenders and fully backstopped by the ad hoc group. Upon emergence, the loans under the DIP term loan facility converted into loans under an exit term loan facility.

CTI is one of the leading independent providers of custom food solutions to major chain restaurants in North America. CTI’s headquarters are located in Saginaw, Texas, and it operates seven production facilities throughout the United States. CTI has approximately 1,900 employees.

The Davis Polk restructuring team included partner Damian S. Schaible, counsel Michelle M. McGreal and Jon Finelli and associates Stephen D. Piraino and Omer Netzer. The finance team included partner Jinsoo H. Kim and associate Kwesi Larbi-Siaw. The corporate team included partner Michael Davis and associate Camila Panama. Counsel Jennifer M. Wolff provided executive compensation advice. All members of the Davis Polk team are located in the New York office. 

Evercore Group L.L.C. acted as financial adviser to the ad hoc group.