Ad Hoc Group of Bondholders in the Closing of IUSA’s Restructuring

Cleary Gottlieb represented an ad hoc group of bondholders, including Gramercy Advisors LLC and Outrider Management, in connection with the September 9, 2011 closing of the restructuring of Industrias Unidas’s (IUSA) indebtedness. The restructuring of approximately U.S.$420 million of indebtedness (including accrued and unpaid interest) was implemented through a plan of reorganization pursuant to chapter 11 of the U.S. Bankruptcy Code in conjunction with an out-of-court exchange offer with respect to IUSA’s bank debt and commercial paper.

IUSA is one of Mexico’s largest diversified industrial groups and a manufacturer of copper-based and electrical products for the housing and electrical power sectors in the United States, Mexico, Europe and Latin America. Following IUSA’s initial default on interest payments for multiple tranches of debt in late 2009, two subsidiaries of IUSA filed voluntary petitions for relief under chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware in December 2009. Since that time, IUSA and its various creditor constituencies negotiated the terms of the restructuring, which culminated in the approval of the chapter 11 plan on August 25, 2011. As part of the restructuring, IUSA’s creditors received two series of senior secured bonds guaranteed by a joint collateral package that includes mortgages over real property, liens on various assets, pledges over the capital stock of IUSA’s subsidiaries, and a specified portion of IUSA’s royalties for the use of certain payment cards in Mexico. The holders of commercial paper and bank debt relating to IUSA’s copper contracts received series B notes. The bondholders and holders of certain bank debt received series A notes that benefit from a pledge of the capital stock of IUSA’s U.S. subsidiary Cambridge-Lee Holdings, Inc., in addition to the joint collateral.