On February 18, 2015, Allen Systems Group, Inc., ASG Federal Inc. and Viasoft International, LLC all filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code.  The cases are docketed at 15-10332, and have been assigned to The Honorable Kevin J. Carey.

As prepackaged cases, the Debtors have, simultaneously with their petitions, filed a disclosure statement and plan.  According to the Declaration of John C. DiDonato (the “DiDonato Declaration”), filed in support of the petitions and other first day pleadings, the chapter 11 plan is supported by the Debtors’ principal creditor constituencies, reflected by a plan support agreement.

According to the DiDonato Declaration the debtors intend to effect a balance sheet restructuring: under the Plan, the Domestic Credit Facility and Foreign Credit Facility will be repaid in full on the plan effective date, and Allen Systems Group, Inc. (“ASG”) will cancel certain Notes Claims in exchange for the Notes Claims Stock representing 41.5% of Reorganized ASG’s New Common Stock.  Other Eligible Holders of Notes Claims will receive subscription rights to participate in the Rights Offering to acquire their pro rata share of the Rights Offering Stock, representing the remaining 58.5% of Reorganized ASG’s New Common Stock.  According to the DiDonato Declaration, the Debtors’ general unsecured creditors, other than holders of Notes Deficiency Claims and Allen Claims (all as defined in the Plan), will be paid in full, and existing equity securities in ASG will be cancelled.

To fund the chapter 11 cases, the Debtors will seek a DIP loan of up to $40 million.  Details of anticipated exit financing facilities are set out on page 22 of the DiDonato Declaration.