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Welcome to the Information Website of the Ombudsman for the Reorganized School Specialty Inc., et al.
On May 23, 2013, the Bankruptcy Court entered an Order confirming the Debtors' Amended Joint Plan of Reorganization (the "Plan"). Click here for link to the Plan. The Plan became effective on June 11, 2013 (the "Effective Date"). Pursuant to the Plan and the Fifth Amended Supplement to the Plan (the "Ombudsman Plan Supplement"), the Ombudsman was appointed as of the Effective Date.
The Ombudsman’s Role:
Generally, the Ombudsman’s role is that of an advocate for trade creditors with regard to the trade election process, and an advocate for creditors in Class 5 (General Unsecured Claims) and Class 6 (Trade Unsecured Claims) with regard to Plan distribution issues. The Ombudsman’s role is described in Article V.I.4 of the Plan and in more detail in the Ombudsman Plan Supplement, but has three primary components. The Ombudsman (who was selected by the Creditors Committee) is authorized to:
(i) Monitor Trade Elections and work to resolve any disputes about Customary Trade Terms between holders of Allowed Class 6 Claims who have made Trade Elections and the Reorganized Debtors;
(ii) Notify holders of Allowed Class 5 and Allowed Class 6 Claims of any event that would, per the Plan, alter the anticipated date for Distributions to holders of Allowed Class 5 and Allowed Class 6 Claims, upon being notified of such event by the Reorganized Debtors; and
(iii) Generally monitor the Reorganized Debtors’ compliance with the provisions of Article V.I of the Plan regarding treatment of holders of Allowed Class 5 and Allowed Class 6 Claims.
Ombudsman's Update (April 14, 2020)
School Specialty filed a form 8-K with the SEC on March 27, 2020. That filing discusses the impact that the Covid-19 pandemic and the resulting school and business closings are having on the Company. Another 8-K filing was made by the Company on April 8, 2020, disclosing that on April 6th, the Company entered into agreements with its lenders to (i) extend certain restructuring-related deadlines from March 31st until April 30th and (ii) extend the date for a term loan installment payment and interest from March 31st until June 30th.
School Specialty’s filings do not provide details of what the potential restructuring will look like, but according to the Company’s forbearance agreement with its lenders, the restructuring support agreement “shall include, among other things, milestones in connection with a potential restructuring or sale transaction of the Company and an agreement among Agent, the Lenders and the Company regarding the terms, scope, and fees to be incurred in connection with the consummation of the transactions contemplated thereunder”.
Links to both of the recently filed 8-Ks are available on this website. We will update the website as we learn more.
We hope everyone is safe and well during these challenging times!
The Ombudsman has been advised by counsel to the Company that these forms of documents have been sent to Class 5 and Class 6 Claimants:
Please click here to view the Ombudsman's Letter dated November 27, 2019 regarding the Company's proposal.
Update re the Company's Proposal (December 26, 2019)
We are advised by School Specialty that it received more than one transaction proposal, each of which is being evaluated by the company and its secured lenders. While deliberations are ongoing, the company is hopeful that the lenders will make a decision by 12/31, though that date may be extended. If one of the proposals is approved, we expect that the 10% distribution will be made shortly thereafter to creditors that entered into the extension agreement.
We will remain in contact with the company and provide you with additional information as it becomes available. Happy holidays, and best wishes for a happy new year.
Alan D. Halperin
Update re the Company's Proposal (January 7, 2020)
We are advised by School Specialty that it has received confirmation from its secured lenders that it has received an acceptable transaction proposal, and that the conditions to making initial payments to creditors who have entered into extension agreements have been satisfied. Further, a third party collateral agent now holds a third lien on certain of the company’s assets for the benefit of the creditors who have entered into the extension agreements. The company will be making initial payments to those creditors as soon as reasonably practicable in accordance with the terms of their respective extension agreements.
We will remain in contact with the company and provide you with additional information as it becomes available.
Alan D. Halperin
Update re the Company's Proposal (January 30, 2020)
School Specialty has recently filed a document with the SEC that indicates that the Company is continuing to negotiate the terms of a transaction with one or more parties. A link to the Company’s filing can be found in the Financial Documents section of this website.
We will update this website as we learn more.
Ombudsman's School Specialty Updates
Please click here to view the Ombudsman's School Specialty Update dated June 21, 2017.
Please click here to view the Ombudsman's School Specialty Update dated February 7, 2017.
Please click here to view the Ombudsman's School Specialty Update dated June 3, 2016.
Please click here to view the Ombudsman's School Specialty Update dated June 11, 2015.
As of July 15, 2015, the Ombudsman has confirmed with the Company that the claims objection process has been completed, and that the amounts of Allowed Claims are:
-Class 5 (General Unsecured Claims) entitled to 20% distribution: $8,987,173.28
-Class 6 (Trade Claims) entitled to 20% distribution (no trade election or no agreement re trade terms): $8,701,382.15
-Class 6 (Trade Claims) entitled to 45% distribution (trade election and agreement re trade terms): $25,792,079.74
The Company further advises the Ombudsman that there has been no Change of Control at the Company. The anticipated date of distributions to holders of Allowed Class 5 and Class 6 Claims is therefore unchanged, and remains mid-December of 2019.
KCC maintains this website at the direction of Alan Halperin, the Ombudsman appointed for the Reorganized Debtors. KCC maintains this website for the public's convenience and, while KCC and the Ombudsman make every attempt to ensure the accuracy of the information contained herein, this website is not the website of the United States Bankruptcy Court and does not contain the complete, official record of the Bankruptcy Court. All documents filed with the Court are available for inspection at the Clerk of the U.S. Bankruptcy Court for the District of Delaware.