Grandparents.com filed with the U.S. Bankruptcy Court a Joint Chapter 11 Plan of Liquidation and related Disclosure Statement.
According to the Disclosure Statement, “This is a liquidating Plan pursuant to which the Debtors’ pre- and post-Petition Date Lender has funded a liquidating trust with a cash contribution of $200,000 for general operations, plus an additional $50,000 specifically earmarked for distribution to Class 3 General Unsecured Claims (i.e., the Plan Fund). Administrative and Priority Claims will be paid in full under this Plan, such that payment of the Plan Fund will not affect payment of those claims. In addition, the Lender has agreed to release its lien against all Litigation Claims, including, but not limited to, claims of the Bankruptcy Estates against current and/or former directors and officers of the Debtors and proceeds recovered in connection therewith on the Effective Date of this Plan. Finally, the Lender has agreed to (i) allocate $50,000 of Lender’s Initial Share of Litigation Claims Proceeds for distribution to holders of Allowed Class 5 Equity Interests and Other Subordinated Claims, (ii) subordinate its rights to distributions under Class 5 until all Allowed Class 5 Claims are paid in full, and (iii) subordinate $1 Million of its Class 4 Lender Unsecured Subordinated Deficiency Claim to Class 5 treatment if distributions to Class 4 total $7,888,538.93.”
In addition, “Class 1 consists of the Lender Secured Claim. The Secured Claim of the Lender in the Allowed amount of $9,188,537.96, which is an aggregate of all amounts due Lender under the DIP Loan Documents ($1,360,916), plus all amounts due under the Prepetition Loan Documents ($9,827,621.96), minus $2,000,000 (the amount of Lender’s credit bid for substantially all of the Debtors’ assets) and is secured by the net proceeds recovered in connection with the non-Chapter 5 Litigation Claims and the remaining Trust Assets (collectively, the ‘Lender Collateral’).”
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