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Judge Craig Goldblatt approved Weight Watchers Chapter 11 plan and disclosure statement at a brief, uncontested confirmation hearing 17 June in the US Bankruptcy Court for the District of Delaware.

In doing so, debtors met a milestone in their prepackaged bankruptcy cases.

In his presentation, Debtors’ counsel Elisha Graff of Simpson Thacher reiterated how under the plan:

• the debtors’ secured debt will be reduced by approximately $1.15bn and its annual interest expense will be reduced by more than $50m
• the debtors’ employees, vendors, and unsecured creditors will be paid in full
• Class 3 1L creditors (the only impaired class) will receive their pro rata share of $465m of new takeback term loans
• subject to the company meeting the 24 June plan effective date milestone:Class 3 1L creditors will receive 91% of the reorganized equity, subject to dilution by a new management incentive plan to be implemented post-emergence.Class 3 1L creditors will gift existing equity with 9% of the reorganized equity
• the debtors will have “ample working capital to operate their businesses successfully” upon completion of the transactions contemplated by the plan

Graff further reported that the debtors had resolved all pending confirmation objections as well as the informal comments that it had received from the UST and the SEC. He also expressed appreciation for the efforts of Gibson Dunn, counsel to the 1L ad hoc group, specifically highlighting the 1L’s willingness to “make that gift of equity available to the existing out-of-the-money equity holders.”

“The level of consensus behind the debtors’ plan… is overwhelming,” he said, noting that the plan “will enable the debtors to fix their overleveraged prepetition capital structure, maximize value for the benefit of all stakeholders, including out of the money equity, and will position the debtors for future growth and success.” Graff concluded by expressing his belief that “implementation of this consensual, comprehensive deleveraging through a quick six-week prepack, …, represents the best use of the tools that the Bankruptcy Code offers to distressed companies.”

Counsel to the 1L ad hoc group, Tommy Scheffer of Gibson Dunn, confirmed Graff’s recounting of the benefits of the plan and further reported that “the Class 3 first lien creditors, the only voting class here, voted unanimously to accept the plan.”

Judge Goldblatt then approved the disclosure statement and confirmed the plan, echoing Graff’s point that when “there's a consensual resolution that seems to maximize value and allows the preservation of going concerned value in a way that everyone agrees is better off, for all, than the next best alternative, that it really is the system working at its best.” “It may be less interesting than when everyone is at each other's throats [but] the cost of that is high and avoiding it is a public good,” Judge Goldblatt said.

The Chapter 11 docket can be found on the 9fin platform.