RCS Capital’s Revised Fourth Amended Joint Chapter 11 Plan of Reorganization became effective and the Company emerged from Chapter 11 protection. The Court confirmed the Plan on May 19, 2016. Cetera Financial Holdings’ Revised Second Amended Joint Prepackaged Plan of Reorganization also became effective and the affiliate Debtor emerged from bankruptcy.
According to documents filed with the SEC, “…[T]he Debtors consummated the transactions described in the Plans and the Company emerged from bankruptcy as a privately-held corporation. Pursuant to the Plans, on the Effective Date, all of the previously-issued common and preferred stock of the Company was deemed discharged, cancelled and extinguished….All of the previously-issued common and preferred stock of the Company was deemed discharged, cancelled and extinguished. Each prepetition first lien secured lender is entitled to receive its pro rata share of 3,875,000 shares of a single class of new common stock of the Company, par value $0.001 per share (the ‘New Common Stock’), on account of $50 million, in aggregate, of the allowed first lien secured claims, and its pro rata share of $500 million in principal amount of debt under a new fully-committed second lien secured term facility on account of the remainder of its first lien secured claims.”
SEC-filed documents continue, “The Creditor Trust was established for the benefit of holders of allowed unsecured claims against the First Wave Debtors, funded with $15 million in cash, a warrant for 1,111,111 shares of the New Common Stock at an exercise price of $34.84 per share…and the Litigation Assets…..Holders of allowed general unsecured claims against the First Wave Debtors will receive the applicable series of Class A Units of the Creditor Trust corresponding to the First Wave Debtor as to which the holders’ claim is allowed, while each prepetition second lien secured lender will receive its pro rata share of Class B Units of the Creditor Trust on account of its second lien deficiency claims. All general unsecured claims against the Second Wave Debtors are unimpaired under the Prepackaged Plan, except to the extent that a holder of such a claim agrees in writing to less favorable treatment.”
Cetera Financial Holdings’ C.E.O., Larry Roth, comments, “We are really excited to be recapitalized and private and have a new board composed of members who are experienced, intelligent and fully engaged. The new name is symbolic, given that the successful turnaround we’ve achieved in the past couple of months, we think, is going to take the firm in a new direction.” RCS Capital (n/k/a Aretec Group, Inc.) filed for Chapter 11 protection on January 31, 2016, listing $2.5 billion in pre-petition assets.
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