💥New Chapter 11 Bankruptcy Filing - ASP Unifrax Holdings Inc. (Alkegen)💥
Another industrial falls into chapter 11, but it won't be there long
On July 26, 2026, Irving, TX-based, Clearlake Capital Group, L.P. (“Clearlake”)-owned ASP Unifrax Holdings Inc. and sixty-two affiliates (collectively, the “debtors” and together with their non-debtor subsidiaries, the “company”) filed previously-announced prepackaged chapter 11 bankruptcy cases in the Northern District of Texas (Judge Everett), which, if we can be honest here, look to be set up to be pretty damn 🍿-free. We are not complaining.
Anyway, the company manufactures thermal management, filtration, emissions control, and battery fire protection “solutions” — think blast furnaces, catalytic furnace linings, exhaust systems — and is the result of Clearlake’s ‘18 acquisition of Unifrax LLC, which in turn acquired Lydall, Inc. in September ‘21 and created the company as it exists today.
It’s a big operation: 3.9k employees, 23 countries, excluding the debtors’ stake in the non-debtor, China-based Luyang Energy-Savings Materials Co. Ltd. ("Luyang”).
The company has two primary divisions: (i) the industrial solutions group, which as the name suggests, is focused on industrial applications and accounted for $636mm, or 64%, of the company’s ‘25 revenue; and (ii) the mobility solutions group, which homes in on the automobile industry, came in at $267mm, or 27%, for the same period.*
Like basically every industrial debtor, the debtors blame the bankruptcy on “… macroeconomic crosscurrents and market-specific pricing pressures …” In other words, interest rates are ⬆️, supply overcapacity is ⬆️, and market share is therefore ⬇️.** In addition, growth initiatives were underwhelming — could there be a root cause lying in CEO and Alvarez & Marsal LLC’s Brian Whittman’s first day dec? Let’s see what he says:
“Alkegen’s highly leveraged capital structure at times led to a focus on higher impact activities with more difficult execution, while under-investing in the core business.”
LOL, holy hell, that’s one of the best commentaries on the virtues of liability management exercises Johnny has ever seen — which happened in ‘24 when the company stepped into this bloated a$$ debt stack:
Mr. Whittman, though, can thank that bloat for his gig. Bob Caruso, the company’s chief restructuring transformation officer, can too. In October ‘25, the company showed prior management the door and brought them on “… to support a comprehensive review of the business, develop a 2026 budget and long-range business plan, and identify and implement a series of performance improvement initiatives,” which, in 1Q26, roped in the next workstream. That is, formulating a deal with an ad hoc group of debt holders (the “ad hoc group”) repped by Davis Polk & Wardwell LLP (“DPW”) and PJT Partners LP (“PJT”). Naturally, a special committee also integrated itself into the mix. That’s composed of David Ford and Todd Arden.
In any event, after a few months of trading term sheets, a deal emerged among the company, the ad hoc group, and Clearlake, which is embodied in a July 19, 2026 restructuring support agreement (the “RSA”). The RSA, as well as the related chapter 11 plan and disclosure statement (the “DS”), is supported by holders of (i) ~99% of 1L claims, (ii) ~80% of 2L claims, (iii) ~95% of the company’s pref A stock, and (iv) ~99% of its senior common stock*** and provides:
📍DIP Facility. A $630mm DIP loan composed of (a) $315mm in new money term loans and notes ($265mm interim) and (b) a $315 million roll-up of the DIP lenders’ 1L term loans and notes (also $265mm interim), which will be used to refinance the prepetition revolver in full. The DIP bears interest at SOFR + 8.375%, with up to 50% PIK, and includes a 5% backstop fee payable in net (discount from the funded proceeds) or cash to the ad hoc group members backstopping the DIP, a 2.5% upfront fee payable by netting, and a 2.25% exit fee.
📍Equity Rights Offering. An up-to $335mm equity rights offering (the “ERO”), which will be offered to 1L holders, for 59% of the reorg equity, subject to dilution by any MIP, and which is also backstopped by members of the ad hoc group. For the backstopping, they will straight-up receive 3% of the reorg equity (the “ERO fee”) under the plan.
📍Treatment of Claims. The plan provides a comprehensive restructuring. 1Ls will receive that right immediately ☝️, as well as $85mm in exit term loans and 100% of the reorg equity prior to giving effect to the ERO, the MIP, the ERO fee, and the junior funded debt recovery … which provides that all other funded debt claims, including 1L deficiency claims, will receive (i) five-year warrants to purchase 5% of the reorg equity at a ~$2b strike price and (ii) 1% of the reorg equity, subject to dilution by the MIP and the new warrants, but not the ERO or the ERO fee. Finally, the big one: GUCs. Imagine our delight when we saw this prepack did the typical prepack thing — it passes GUCs through entirely unimpaired. If there’s an official committee of unsecured creditors in the cases, we can’t imagine them complaining. Clearlake, as equity sponsor, will also receive the customary treatment — cancellation in full of its equity interests.
📍Exit Term Loan. To get out of bankruptcy, there’s a pre-baked $400mm term loan that’ll be put to use by refinancing the DIP and giving the 1Ls’ their $85mm in take-back debt.
📍Timeline. It’s fast. Obviously.
Will anyone have any issues with the pace? GUCs aren’t hurt, and the deleveraging is massive …
… so we reckon ‘no’.
The court held the first day hearing on July 28, 2026. Unfortunately, the audio isn’t available, but we imagine there was a lot of hand-holding and back-patting. Regardless, the court granted all requested relief and scheduled (i) the second day hearing for August 25, 2026 at 9:30am CT and (ii) the combined hearing on confirmation of the plan and final approval of the DS for September 3, 2026 at 10:30am CT.
The debtors are represented by Kirkland & Ellis LLP (Anup Sathy, Steven Serajeddini, Nicholas Adzima, Margaret Reiney) and Gray Reed (Jason Brookner, Lydia Webb, Emily Shanks) as legal counsel, Alvarez & Marsal LLC (Brian Whittman, Bob Caruso, Doug Donoghue) as financial advisor, CEO, and CTO, Centerview Partners LLC (Robert Beasley) as investment banker, and C Street Advisory Group as strategic communications advisor. Todd Arden and David Ford are the debtors’ independent directors and compose its special committee, which is represented by Katten Muchin Rosenman LLP (Steven Reisman, Marc Roitman, Robert Smith, Michael Rosella, Michaela Croker) as legal counsel. The ad hoc group is represented by DPW (Damian Schaible, Angela Libby, Jarret Erickson, Jacob Goldberger) and Haynes and Boone, LLP (Ian Peck, Jordan Chavez, Kelli Norfleet, David Trausch) as legal counsel and PJT Partners LP as investment banker. Wilmington Savings Fund Society FSB, as DIP agent and 1L collateral agent, is represented by Seward & Kissel LLP (John Ashmead, Gregg Bateman, Catherine LoTempio) and Blank Rome LLP (Buffey Klein, Jordan Williams) as legal counsel. JPMorgan Chase Bank NA, as the 1L admin agent, is represented by Paul Hastings LLP (Matthew Warren, Charles Persons, William Reily) as legal counsel. Wilmington Trust NA, as the indenture trustee under the debtors’ senior unsecured notes, is represented by Kelley Drye & Warren LLP (James Carr, Kristin Elliott, Andrew Matott, Jennifer Provenzano) as legal counsel.
*The company’s industrial filtration group — felt-based filtration materials for industrial waste gases — rounded up the last 9% ($88mm in revenue). It also has a start-up business business in the lithium-ion battery-space, which hasn’t yet reached commercialization.
**For a point of reference, Luyang’s sales fell by $141 million in ‘25, leading to a decrease in adjusted EBITDA of 50%+.
***The “vast majority” of the company’s stock is held by Clearlake entities.
Company Professionals:
Legal: Kirkland & Ellis LLP (Anup Sathy, Steven Serajeddini, Nicholas Adzima, Margaret Reiney) and Gray Reed (Jason Brookner, Lydia Webb, Emily Shanks)
Financial Advisor/CEO/CTO: Alvarez & Marsal LLC (Brian Whittman, Bob Caruso, Doug Donoghue)
Investment Banker: Centerview Partners LLC (Robert Beasley)
Strategic Communications Advisor: C Street Advisory Group
Disinterested Directors: Todd Arden, David Ford
Legal to Special Committees: Katten Muchin Rosenman LLP (Steven Reisman, Marc Roitman, Robert Smith, Michael Rosella, Michaela Croker)
Claims Agent: (Click here for free docket access)
Other Parties in Interest:
Ad Hoc Group of Lenders
Legal: Davis Polk & Wardwell LLP (Damian Schaible, Angela Libby, Jarret Erickson, Jacob Goldberger) and Haynes and Boone, LLP (Ian Peck, Jordan Chavez, Kelli Norfleet, David Trausch)
Investment Banker: PJT Partners LP
DIP Agent and 1L Collateral Agent: Wilmington Savings Fund Society FSB
Legal: Seward & Kissel LLP (John Ashmead, Gregg Bateman, Catherine LoTempio) and Blank Rome LLP (Buffey Klein, Jordan Williams)
1L Admin Agent: JPMorgan Chase Bank NA
Legal: Paul Hastings LLP (Matthew Warren, Charles Persons, William Reily)
Indenture Trustee under the 7.5% senior unsecured notes due ‘29: Wilmington Trust NA
Legal: Kelley Drye & Warren LLP (James Carr, Kristin Elliott, Andrew Matott, Jennifer Provenzano)
Sponsor: Clearlake Capital Group LP