Performance Sports Group filed with the U.S. Bankruptcy Court a Modified Joint Chapter 11 Plan of Liquidation and related Disclosure Statement.
According to the Disclosure Statement, “The Plan provides Holders of Parent Equity Interests with two options for receiving their distributions. The Debtors, after consultation with the Committees and the Monitor, included such options to mitigate potential adverse tax consequences that the Reorganized Parent Debtor and Holders of Parent Equity Interests may suffer if distributions were made directly to Holders. The Plan options can result in different tax implications for the Holders of Parent Equity Interests, and such implications may or may not be favorable to the Holders.”
In addition, “Given the complexity of cross-border tax implications, no assurances can be given that the Plan options are the best options available to Holders of Parent Equity Interests, that either option will mitigate adverse tax implications for such Holders, or that the Plan options will otherwise impact or affect – positively or negatively – a Holder’s tax obligations. Finally, if any Holder of Allowed Parent Equity Interests elects Option 1 and the Liquidation Trust is subject to adverse tax consequences in Canada as a result of such Holder holding Beneficial Trust Interests, any transfer to such Holder and the cancellation of such Holder’s Parent Equity Interests may be deemed void ab initio by the Liquidating Trustee, in the Liquidating Trustee’s sole discretion, in which event the Holder whose election was deemed null and void shall retain its Allowed Parent Equity Interests in the Reorganized Parent Debtor, and the Reorganized Parent Debtor, the Holder and the Liquidation Trust shall each treat such Holder at all times as if such Holder had elected Option 2.”
The Court subsequently approved the Disclosure Statement and scheduled a December 7, 2017 hearing to consider the Plan, with objections due by November 30, 2017.
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