Grupo Famsa S.A.B. de C.V.

June 26, 2020

This may very well be the most boring bankruptcy case of all time.

Grupo Famsa S.A.B. de C.V., a Mexican retailer and personal lender with 22 stores and 29 personal loan branches in the states of Texas and Illinois (in addition to 379 stores in Mexico), filed a prepackaged chapter 11 bankruptcy case in the Southern District of New York to basically just refi out a whopping $59.1mm of 7.25% senior notes that were due on June 1 2020. These 2020 notes constitute a remaining stub piece that didn’t participate in an October 2019 exchange offer. In that transaction, the then-outstanding 2020 notes were exchanged for 9.75% senior secured notes due 2024. $80.9mm tendered into that offer. The $59.1mm at issue here … uh … well, clearly … did not.

Holders of the 2020 notes who vote in favor of the plan will get new Series A notes in the same principal amount plus interest and cash in an amount of $10 per $1,000 principal amount of 2020 notes. These Series A notes will pay 10.25% interest and mature in December ‘23.

Those who reject the plan will receive new Series B notes in the same principal amount equal to what they hold (read: no cash payment). The Series B notes accrue interest at 9.75% and mature in December ‘24. All other potential claims against the debtor will be reinstated or unimpaired.

The upshot? It paid to holdout! Those who support the plan and get the Series A notes will get the same principal amount of notes, a higher rate and have shorter duration risk. Well played.

• Jurisdiction: S.D. of New York (Judge Chapman)

• Professionals:

  • Legal: Paul Hastings LLP (Pedro Jimenez, Shlomo Maza, Derek Cash)

  • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on the link above for free docket access)