AmGyp, LLC – A Case Study

The 2009 Complex Financial Restructuring Program will address the case study of AmGyp, LLC. and its subsidiaries. AmGyp is a vertically integrated producer and distributor of wallboard products serving residential and commercial applications throughout the US. AmGyp and its subsidiaries are experiencing financial distress. In particular, the severe downturn in the housing industry has substantially impaired AmGyp’s operating metrics and have resulted in covenant defaults with its lenders. The full case study, together with some assumptions which will be incorporated into the 2009 CFRP will be emailed to the participants.

The CFRP Panel discussions will address:

AmGyp’s default on its Senior Loan Facility – To file or not to file?

The Company and its management team will make a presentation which will involve a discussion around the company’s impending liquidity crisis and the possible solutions, including the sale of a subsidiary, potential IRS refunds and a new product launch. Moderators will probe the company’s CEO, investment banker and counsel with respect to the cost/benefits of chapter 11, including preference and fraudulent conveyance analyses, lease rejections, rejection of collective bargaining agreements and the like. The Company will also address alternatives to chapter 11.

The Company’s Senior Lender will present their perspective relative to the filing of a chapter 11 proceeding and the timing issues related to such a filing. Moderators will explore the lenders view of in versus out-of-court restructuring of the senior loan facilities, alternative liquidity opportunities and the issue of a third party DIP proposal.

The Noteholders will weigh-in with respect to the issue of filing a chapter 11 and address the issues central to them in the context of AmGyp’s s restructuring. Moderators will investigate the “loan to own” issues and the internal conflicts presented to the noteholder group.

The morning session will wrap up with a presentation and survey of the parochial interests whose claims need to be addressed in either a filing or out of court workout. Specifically, moderators will examine the positions of the IRB Bondholders, the Union, the Oswald product liability judgement holders, the supply contract claims that might be created through a rejection of the Blue Square Power agreement, the potential lease rejection claims of the NH landlord, and finally the perspective of the private equity firm that owns AmGyp.

AmGyp Files for Chapter 11 Relief

The afternoon session will commence with a discussion of AmGyp’s decision to file a chapter 11. The moderators will focus a discussion with the Company and its management around the timing of the filing and the financing necessary to implement the case. Management and its CRO will discuss the strategic and operations recommendations and the impact of such an implementation on the plan. The Company’s investment banker will address issues of valuation, debt capacity and the availability of consummating exit financing. The moderators will focus on the amount and form of consideration available for distribution to the constituencies under the Plan.

After hearing the Company’s proposal, the panel of constituents will discuss the plan and cast their votes on the proposal advanced by the Company.

The program will conclude with discussions of confirmability and observations about what options might have been considered together with potential alternative outcomes.

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