In Re Exide Technologies

303 B.R. 48 (2003)

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Nature of the Case

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Facts

On April 15, 2002, P filed chapter 11. continues in possession of its properties and is operating and managing its businesses as a debtor and debtor in possession pursuant to §§ 1107(a) and 1108 of the Bankruptcy Code. On April 29, 2002, the United States Trustee appointed the Official Committee of Unsecured Creditors (UD). On September 23, 2002, the Court entered an order appointing the Official Committee of Equity Security Holders of Exide Technologies (D). P manufactures and supplies lead-acid batteries for transportation and industrial applications. On the Petition Date, P and certain lenders (DIP Lenders) entered into the Secured Super Priority Debtor in Possession Credit Agreement (DIP Agreement). The Prepetition Lenders executed a Standstill Agreement to forbear from exercising any of their rights and remedies relating to defaults under the prepetition credit agreement against the P's non-debtor affiliates until December 18, 2003. On January 16, 2003, the Creditors Committee commenced a suit against the Prepetition Lenders in the adversary proceeding styled Official Committee of Unsecured Creditors, et al v. Credit Suisse First Boston et al. The allegation is that, in financing P's purchase of GNB in 2000, the Prepetition Lenders were able to obtain significant control over P, enabling the Prepetition Lenders to force P to provide them with additional collateral and to control Ps bankruptcy filing. As for the voting on P's plan, the Class P3 (Prepetition Credit Facility Claims) voted overwhelmingly in favor of the Plan, while Class P4 (General Unsecured Claims) voted overwhelmingly against the Plan. Each side offered their own expert to testify about P's enterprise value. P presented the expert testimony and valuation analysis of Arthur B. Newman ('Newman'), a senior managing director and founding partner of the Restructuring and Reorganization Group of The Blackstone Group, L.P. The Creditors Committee presented the expert testimony and analysis of William Q. Derrough, a managing director and co-head of the Recapitalization and Restructuring Group of Jefferies & Company, Inc. Both used the same three methods to determine the Debtor's value: (i) comparable company analysis; (ii) comparable transaction analysis; and [ (iii) discounted cash flow. P's expert set the value in a range between $950 million and $1.050 billion. D's expert set the value in a range between $ 1.478 billion and $ 1.711 billion.