Diebold Nixdorf chapter 11: .25B DIP-to-Exit and the First U.S./WHOA Cross-Border Restructuring

Diebold Holding Company, LLC and ten affiliated debtors filed voluntary chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of Texas (Houston Division) on June 1, 2023, lead case 23-90602, before Hon. David R. Jones. The filing implemented a restructuring support agreement executed two days earlier and was paired with a parallel Dutch WHOA proceeding by Diebold Nixdorf Dutch Holding B.V. to bind euro-denominated noteholders that the U.S. case alone could not reach.

The prepackaged plan moved through the docket in 41 days. Judge Jones confirmed the Second Amended Joint Prepackaged Plan on July 12, 2023, and the plan went effective on August 11, 2023. The transaction reduced funded debt from approximately $2.7–2.8 billion to $1.25 billion, equitized the prepetition First Lien Claims into 98% of the new common stock, and converted a $1.25 billion debtor-in-possession facility automatically into a five-year exit term loan. Existing equity in Diebold Nixdorf, Incorporated was cancelled.

Debtor(s)	Diebold Holding Company, LLC (10 jointly administered entities)
Court	U.S. Bankruptcy Court, Southern District of Texas (Houston Division)
Case Number	23-90602
Petition Date	June 1, 2023
Judge	Hon. David R. Jones
Plan Type	Prepackaged chapter 11 plan of reorganization
RSA Executed	May 30, 2023
Confirmation Date	July 12, 2023
Effective Date	August 11, 2023
DIP Facility	$1.25 billion DIP-to-exit term loan; GLAS USA LLC as administrative agent; SOFR + 7.50% / ABR + 6.50%
Parallel Proceeding	Dutch WHOA scheme (Netherlands)

Acquisition Overhang and the 2025 Maturity Wall

The First Day Declaration of Carlin Adrianopoli attributes the filing to the cumulative weight of acquisition-driven leverage, an approaching wave of 2025 maturities, and post-pandemic operating headwinds that prevented the company from refinancing through the capital markets. Diebold's 2016 acquisition of Wincor Nixdorf left the combined business carrying a debt load that flat-to-declining sales growth and compressed gross margins could not service, and the Adrianopoli declaration projected cumulative cash burn of more than $600 million through the end of 2023 driven by post-acquisition capital investment and restructuring costs.

A series of credit events compressed the runway. The company's credit rating was downgraded to CCC+ in May 2022, and the FILO Facility was set to mature on June 4, 2023, with the 2025 USD and Euro Term Loan Facilities and 2025 USD and Euro Secured Notes all maturing on July 15, 2025. Supply chain disruption, rising inflation, and COVID-19 cost pressure increased manufacturing costs and produced an unfilled order backlog of approximately $1.4 billion at year-end 2022, leaving the company unable to convert demand into liquidity at the pace its debt schedule required.

The pre-filing remediation efforts did not solve the underlying maturity stack. On February 10, 2023, Diebold commenced a public exchange offer for its remaining untendered 2024 Senior Notes; the offer was extended multiple times and remained open through the petition date without achieving its objective. On March 21, 2023, the company entered into a "last out" FILO amendment to its ABL Credit Agreement that injected an additional $55 million of liquidity, described as a stopgap rather than a long-term solution. By the time the RSA was executed on May 30, 2023, the maturity wall and exchange-offer failure had effectively foreclosed an out-of-court fix.

Prepetition Capital Structure and the December 2022 Refinancing

Diebold entered chapter 11 with a layered capital structure that aggregated to roughly $2.7–2.8 billion of funded debt across eleven instruments. The stack reflected a December 29, 2022 refinancing that extended maturities and issued new tranches but did not reduce leverage to a sustainable level.

The December 2022 refinancing produced the Superpriority Term Loan tranche and the 2025 Secured Notes that became the fulcrum classes in the eventual prepackaged plan. The Second Lien tranche (PIK at 8.50%) sat below the secured stack and ultimately recovered only through a consensual gift from First Lien creditors; the small untendered stub of 2024 Senior Notes that survived the failed exchange offer became Class 7 in the plan and the only impaired voting class to reject.

$1.25 Billion DIP-to-Exit Facility

On the first day, the debtors filed an emergency motion to approve a $1.25 billion senior secured superpriority debtor-in-possession term loan facility with GLAS USA LLC as administrative agent and GLAS Americas LLC as collateral agent. The lender group consisted of the consenting first lien creditors who were party to the RSA. Pricing was Term SOFR (4.00% floor) plus 7.50%, or Alternate Base Rate (5.00% floor) plus 6.50%. The court entered the interim DIP order on June 2, 2023, and the final DIP order on July 12, 2023.

The facility was structured in two tranches. Tranche B-1 was sized to refinance the prepetition Superpriority Term Loan Facility in full at closing; Tranche B-2 funded the remainder of the $1.25 billion commitment as new money. Use of proceeds was strictly limited to refinancing the prepetition ABL Facility (including the FILO loans) and Superpriority Term Loan, and to funding administrative costs of the cases. Adequate protection for First Lien and Second Lien parties consisted of replacement liens on DIP collateral, superpriority claims for diminution in value, and information rights — without an equitization feature attached to the DIP itself.

The defining structural feature was the DIP-to-exit conversion. The facility was designed from inception to convert automatically into the exit term loan upon plan effectiveness, eliminating the need for a separate exit financing syndication. The exit facility term sheet carried over the same SOFR + 7.50% pricing, set the maturity at the fifth anniversary of the exit date (approximately August 2028), and included no amortization and no financial covenants. Voluntary prepayment or refinancing within 18 months carries a 5.00% premium; refinancing through the Accordion Basket within 18 months carries a 1.00% premium. A $200 million cap applies to mandatory prepayment carve-outs for revolving indebtedness.

Dutch WHOA Proceeding and Cross-Border Coordination

Approximately €446 million of the prepetition stack — the 2025 Euro Term Loan and 2025 Euro Secured Notes — sat at non-debtor Netherlands subsidiaries that could not be bound by a U.S. plan alone. To reach those holders, Diebold filed a parallel WHOA scheme (Wet homologatie onderhands akkoord) by Diebold Nixdorf Dutch Holding B.V. and certain affiliated Netherlands-based entities. The U.S. court entered a Section 1505 order authorizing the company's financial advisor to act as foreign representative, and the combined hearing/solicitation order coordinated the U.S. and Dutch confirmation timelines.

Jones Day, which represented the company across both proceedings, has described the Diebold matter as the first-ever dual proceeding under chapter 11 and the WHOA. The Turnaround Management Association recognized the cross-border restructuring with its 2024 International Company Turnaround/Transaction of the Year Award, citing the simultaneous U.S. and Dutch sanctioning. The structure has since been cited by counsel and academic commentators as a template for binding euro-denominated creditors that hold instruments at non-U.S. subsidiaries.

Plan Treatment, Equitization, and Class 7 Cramdown

The Second Amended Joint Prepackaged Chapter 11 Plan was confirmed on July 12, 2023, with the confirmation order entered the following day. Class treatment under the confirmed plan:

Ducera Partners estimated reorganized enterprise value at $2.15–$2.45 billion (midpoint approximately $2.3 billion), with equity value available for distribution of $616–$786 million (midpoint approximately $710 million). At the midpoint, First Lien Claims received approximately a 38.4% recovery and the Second Lien and Class 7 Stub Unsecured recoveries were each approximately 4.8% — described in the confirmation declarations as a consensual gift from the First Lien creditors, who were themselves significantly under-secured. Without that gift, both classes would have received zero in a liquidation analysis.

The voting record produced one rejecting class. Classes 5 (First Lien) and 6 (Second Lien Notes) accepted, but Class 7 (the holders of the small untendered stub of 2024 Senior Notes that had survived the failed exchange offer) voted to reject. The plan was confirmed over Class 7's rejection under the cramdown provisions of section 1129(b). The confirmation order included customary third-party release provisions for releasing parties who did not opt out, with opt-out notices distributed to non-voting claim holders, and customary exculpation for the debtors, the reorganized debtors, and their retained professionals. Holders of 8.5% Senior Notes due 2024 received the cancellation notice and the ~4.8% cash payment after the effective date.

Contested Matters: Barchas Motion to Dismiss, BRG Appeal, and Oracle Cure

Although the case was prepackaged and broadly supported by the funded-debt creditor groups, four contested workstreams ran alongside the confirmation track.

Richard Barchas motion to dismiss. On June 20, 2023, Richard Barchas filed a motion to dismiss the case for cause under 11 U.S.C. § 1112(b), arguing the filing was made in bad faith to circumvent state-court litigation and that the debtors lacked a legitimate reorganization purpose. The debtors filed an objection on July 11, 2023, and the court initially denied the motion as moot following plan confirmation on July 25, 2023. The motion was reset for hearing in March 2024, an unusual procedural posture for a post-effective reorganized debtor. The reorganized debtors' further objection argued, among other things, that the debtors had filed to address an acute liquidity crisis and preserve going-concern value, that they were insolvent at filing with Class 7 notes "completely out of the money," and that the confirmed and consummated plan itself refuted any bad faith allegation. The reorganized debtors' proposed order reflected denial of the motion.

BRG 50 Executive, LP plan objection and appeal. BRG 50 Executive, LP filed an objection to the prepackaged plan on July 7, 2023; the objection was addressed at the combined confirmation hearing and the confirmation order entered notwithstanding it. BRG subsequently filed a notice of appeal on July 27, 2023, with the appellee designation of record filed in August 2023.

Oracle America cure objection. Oracle America, Inc. filed a cure objection on July 4, 2023, in connection with the notice of assumption of executory contracts and unexpired leases. The objection was resolved in connection with the assumption process under the confirmed plan.

PBGC stipulation and U.S. Trustee informal objection. The Pension Benefit Guaranty Corporation asserted claims relating to the Diebold, Incorporated Retirement Plan for Salaried Employees, encompassing unfunded benefit liabilities, unpaid minimum funding contributions, and unpaid PBGC premiums. A stipulation entered on June 30, 2023, permitted the PBGC to file consolidated proofs of claim in the lead case across all ten debtor entities for administrative convenience, without prejudice to substantive rights. The amended agenda for the July 12 confirmation hearing reflected an informal U.S. Trustee objection to plan treatment terms, which the debtors worked to resolve before or at the combined hearing.

Professional Retentions and the Jackson Walker Fee Controversy

Jones Day served as lead counsel to the debtors, with Ducera Partners LLC as investment banker, FTI Consulting, Inc. as financial advisor, and Jackson Walker LLP as co-counsel and conflicts counsel. Kroll Restructuring Administration LLC served as claims and noticing agent. First and final fee awards reflected the speed and concentration of the case:

The Ducera Partners fee application covered $14,000,000 in fees plus $11,425.95 in expenses across monthly, transaction, and financing fee components, reflecting Ducera's role in negotiating the RSA, DIP, and exit facility. The Jones Day fee application and the FTI Consulting fee application covered the same June 1–July 12, 2023 period.

The Jackson Walker fee path diverged from the others. On October 25, 2023, the court entered an order directing Jackson Walker to supplement its application with specific disclosures regarding any payments to, time billed by, or consultations with the Law Office of Liz Freeman, noting that the engagement of Liz Freeman as Special Conflicts Counsel was contingent on proper conflict clearances. Jackson Walker filed its supplement on November 1, 2023. On November 5, 2023, the firm filed an emergency motion to continue the fee hearing, citing an active U.S. Trustee review of fees the firm had charged in multiple cases before Judge Jones, with the U.S. Trustee requesting that prior fee approval orders in other cases be vacated to allow 120 days for parties to object. The court entered an order continuing the hearing on November 6, 2023. The Jackson Walker workstream in the Diebold case became part of the broader controversy that affected multiple SDTX cases in late 2023.

Key Timeline

Frequently Asked Questions

Who is the claims agent for Diebold Nixdorf?

Kroll Restructuring Administration LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

When did Diebold's prepackaged plan go effective?

The plan went effective on August 11, 2023, approximately 71 days after the June 1, 2023 petition date and 30 days after Judge David R. Jones confirmed the plan on July 12, 2023.

How much funded debt did the restructuring eliminate?

The prepackaged plan reduced funded debt from approximately $2.7–2.8 billion to $1.25 billion, a roughly 55% reduction. The reduction was effected through a debt-to-equity conversion in which First Lien Claims received 98% of the new common stock and Second Lien Notes Claims received 2%, with the prior public common stock cancelled.

What was the Dutch WHOA proceeding for?

The parallel WHOA scheme by Diebold Nixdorf Dutch Holding B.V. and affiliated Netherlands entities was used to bind holders of euro-denominated obligations — principally the 2025 Euro Secured Notes — that sat at non-U.S. subsidiaries the chapter 11 case alone could not reach.

For more bankruptcy case coverage, visit the ElevenFlo bankruptcy blog.