Triad Guaranty filed with the U.S. Bankruptcy Court a Disclosure Statement with respect to its previously-filed Joint Plan of Reorganization.
The Disclosure Statement notes, “The Plan provides that all Holders of Allowed Administrative Expense Claims, Allowed Priority Claims, and Allowed General Unsecured Claims against the Debtor will be paid in full. The Plan provides that Holders of Equity Interests shall retain their Previously Issued Common Stock, but such stock shall be subject to dilution from the issuance of New Common Stock, and because of the issuance of certain warrants under the Third Financing Order. The Plan proposes to fairly and efficiently restructure the Debtor’s liabilities and distribute the Debtor’s assets in a manner that will allow this Chapter 11 Case to be promptly concluded. The Plan designates three (3) series of Classes of Claims and Equity Interests, which classes take into account the differing nature of the various interests and their relative priorities under the Bankruptcy Code and applicable non-bankruptcy law.”
In addition, “The DIP Financing Loan is a loan from Triad DIP Investors LLC in the amount of no less than $400,000 that was authorized and approved by the Bankruptcy Court….On the Effective Date, the Reorganized Debtor shall perform the following: (a) All of the shares of the New Common Stock issued pursuant to the Plan shall be duly authorized, validly issued, fully paid, and non-assessable. (b) In addition, the New Common Stock will be subject to transfer restrictions summarized below (the ‘NOL Protective Provision’) to prevent an ‘ownership change’ within the meaning of IRC Section 382 from occurring until certain conditions summarized below are satisfied.”
The Court scheduled an October 25, 2017 hearing to consider the Plan, with objections due by October 16, 2017, and a September 8, 2017 Disclosure Statement hearing, with objections due by August 28, 2017.
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