Filing Alert: Alkegen Chapter 11

Update (July 27, 2026): A comprehensive case summary is now available for the Chapter 11 bankruptcy filing of ASP Unifrax Holdings, Inc.

ASP Unifrax Holdings, Inc. and its debtor affiliates⁽¹⁾, an Irving, TX-based manufacturer of high-performance specialty materials operating under the Alkegen brand, filed for Chapter 11 protection on Jul. 26 in the U.S. Bankruptcy Court for the Northern District of Texas.

The prepackaged filing aims to implement a comprehensive, consensual balance sheet restructuring pursuant to a Restructuring Support Agreement (RSA) executed on July 19, 2026 with an ad hoc group holding First Lien Term Loans, First Lien Notes, and Second Lien Notes (the "Ad Hoc Group") and sponsor Clearlake Capital Group, L.P. The company attributes its distress to an onerous, overleveraged capital structure layered atop weakened global demand for industrial products, driven by elevated interest rates, persistent Chinese supply overcapacity and the resulting pricing competition and margin compression, a stalled North American EV transition, product-development underperformance across growth initiatives that underpinned its prior refinancing, and suboptimal capital allocation. The company's 52.66% stake in non-Debtor Luyang has amplified its exposure to Chinese overcapacity, with Luyang's market capitalization down approximately 60% since the 2022 control acquisition and its 2025 sales down $141 million, curtailing dividend flow to the Debtors.

The company's September 2024 out-of-court refinancing (the "2024 Refinancing") extended funded debt maturities to 2028 and 2029, captured roughly $150 million of discount via note exchanges, and provided approximately $350 million of incremental liquidity, but did not meaningfully reduce the overall debt burden. With the PIK-toggle options on the Senior Facilities and Second Lien Notes set to expire September 30, 2026—adding approximately $110 million of incremental annual cash interest—forecasted 2026 annual debt service was projected at approximately $320 million, up from $297 million in 2025. Operational initiatives, including the A&M-led "Project Horizon" reorganization into two divisions, proved insufficient to service the prepetition debt load absent a comprehensive balance sheet restructuring.

The Plan contemplates the equitization of substantially all of the company's funded debt, addressing approximately $3.5 billion of prepetition funded debt obligations and eliminating approximately $3.1 billion of that debt, while leaving general unsecured creditors unimpaired via reinstatement. Holders of Allowed First Lien Secured Claims will receive their pro rata share of $85 million in Exit Term Loans and 100% of the New Equity Interests (subject to dilution by a management incentive plan and the equity rights offering), together with rights to participate in a $335 million equity rights offering for 59% of the New Equity Interests; holders of Unsecured Funded Debt Claims will receive New Equity Warrants and equity interests, and existing HoldCo equity will be cancelled. The Restructuring Transactions carry the support of holders of 99% of First Lien Claims, 80% of Second Lien Notes Claims, 95% of Preferred A Stock, and 99% of Senior Common Stock.

To fund the cases and post-emergence operations, the Debtors have secured a $630 million senior secured superpriority DIP facility, comprising $315 million of new money term loans and notes and a $315 million roll-up of prepetition first lien obligations, backstopped by the Backstop Parties in exchange for the DIP Backstop Premium. DIP proceeds will repay the Revolving Credit Facility in full and fund the estates, against approximately $35 million of unrestricted cash on hand as of the Petition Date. Upon emergence—funded by up to $400 million in Exit Term Loans, equity rights offering proceeds, and a potential $150 million new RCF—the company expects to carry only $400 million of funded debt and approximately $200 million of liquidity.

ASP Unifrax Holdings, Inc. reports $1 billion to $10 billion in both assets and liabilities. The filing indicates that there will be funds available for distribution to unsecured creditors. The case number is 26-80008.

⁽¹⁾ For a complete list of debtor entities, see the Chapter 11 Debtors table.

Chapter 11 Debtors

Top Unsecured Claims

Key Parties

Counsel:

• Jason S. Brookner
  Gray Reed
  Email: jbrookner@grayreed.com

General Bankruptcy Counsel:

• Kirkland & Ellis LLP

Financial Advisor:

• Alvarez & Marsal North America, LLC

Investment Banker:

• Centerview Partners LLC

Counsel to the Special Committees:

• Katten Muchin Rosenman LLP

Signatories:

• William K. Piotrowski – Authorized Signatory

Claims Agent:

• Kroll Restructuring Administration LLC

Equity Security Holders:

• Ulysses Parent, Inc. – 100% Equity Interest

Bondoro Insights is continuing to monitor this case and will provide further coverage as appropriate.

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