The U.S. Bankruptcy Court approved Crossroads Systems’ Disclosure Statement and concurrently issued an order confirming its Plan of Reorganization, with technical modifications.
According to documents filed with the Court, “The Prepackaged Plan effectuates the terms of an agreement with 210/CRDS Investment (‘210’), that will (i) provide the Debtor with an equity investment of $4 million and additional financing of $10 million which will allow the Debtor to monetize its patents, make profitable acquisitions, run the Debtor’s business and fund necessary capital expenditures all to maximize shareholder return; (ii) retire all issued and outstanding preferred stock; (iii) pay all Administrative, Secured, Priority, General Unsecured, and Subordinated Claims in full; and (iv) allow common shareholders to retain their Interests. Subject to the terms and conditions of the Plan and related restructuring support agreement with 210/CRDS Investment, 210/CRDS Investment will invest $4 million cash in Crossroads Systems in exchange for shares of the reorganized company’s common stock representing approximately 49.49% of the common stock of the reorganized company.”
In addition, “The Plan provides for the payment of all creditor claims in full, for holders of Preferred Shares to receive their pro rata share of $2,672,233.78 in cash plus 8% of the common stock of the reorganized company, and for holders of common stock to exchange their existing shares of common stock for an equivalent number of new shares of the common stock of the reorganized company, which shares would constitute approximately 42.51% of the outstanding share of the common stock of the reorganized company.”
The Debtors also filed a notice of amendments to the Plan Supplement filed on September 11, 2017. This intellectual property licensor filed for Chapter 11 protection on August 13, 2017, listing $5.6 million in pre-petition assets.
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