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Ignite Restaurant Bankruptcy DS Approved

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The U.S. Bankruptcy Court approved Ignite Restaurant Group’s Disclosure Statement related to its Amended Chapter 11 Plan.

According to the Disclosure Statement, “The Plan is premised on the substantive consolidation of all of the Debtors with respect to the treatment of all Claims and Interests. The Plan shall serve as a request by the Debtors, in lieu of a separate motion, to the Bankruptcy Court, that it grant substantive consolidation with respect to the treatment of all Claims and Interests as follows: on the Effective Date, (a) all assets and liabilities of the Debtors will be merged or treated as though they were merged; (b) all guarantees of the Debtors of the obligations of any of Debtor and any joint and several liability of any of the Debtors shall be eliminated; (c) each and every Claim of a Debtor held against another Debtor shall be deemed released, cancelled and terminated; and (d) each and every Claim and Interest against any Debtor shall be deemed Filed against the consolidated Debtors and all Claims Filed against more than one Debtor for the same liability shall be deemed one Claim against any obligation of the consolidated Debtors. Substantive consolidation is appropriate here.”

In addition, “Pursuant to the Settlement, the Lenders will be receiving all of the net proceeds of the sale, except for $900,000 to be distributed to general unsecured creditors. The cost of determining the appropriate distributions and disentangling intercompany claims, absent substantive consolidation, would be prohibitive.”

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