A’GACI filed with the U.S. Bankruptcy Court a Second Amended Disclosure Statement related to its Chapter 11 Plan. According to the amended Disclosure Statement, “The estimated total amount of Allowed Class 1 Claims is $5.8 million. The estimated total amount of Allowed Class 6 Claims is approximately $18.1 million to $19.1 million. The amount of the Bank of America – BOA Deficiency Claim has not been included in the Debtor’s estimated total amount of Allowed Class 6 Claims because the Debtor has not conducted an analysis of the current value of BOA’s collateral, which consists of equipment and fixtures at the Distribution Center. The BOA Claim is bifurcated between the BOA Secured Claim and the BOA Deficiency Claim. As of the Petition Date, approximately $4,265,902 in principal amount remained outstanding under the Term Loan Credit Agreement. Hypothetically, if the BOA Deficiency Claim was included as a General Unsecured Claim with a range of $1 million to $3.3 million, then the total estimated amount of General Unsecured Claims would increase to approximately $19.1 million to $22.4 million, resulting in projected recoveries for General Unsecured Claims of $17.9% to 20.9%….The BOA Claim arises from the Debtor’s obligations under the Term Loan Credit Facilities, and is comprised of both the BOA Secured Claim and the BOA Deficiency Claim. Class 2 consists of the BOA Secured Claim, whereas the BOA Deficiency Claim falls under Class 6 as a General Unsecured Claim. The Debtor’s obligations under the Term Loan Credit Facilities are secured pursuant to a security agreement dated January 19, 2017 (the ‘BOA Security Agreement’). Under the BOA Security Agreement, the collateral for the Term Loan Credit Facilities includes certain equipment and fixtures described in Exhibit A to the BOA Security Agreement, namely, a large conveyor system at the Distribution Center. BOA asserts a security interest in $62,193.71 of the Debtor’s funds, which are currently on deposit in the Debtor’s BOA accounts and subject to an administrative freeze.” The Court subsequently approved the Second Amended Disclosure Statement and scheduled a July 26, 2018 Plan confirmation hearing with objections due by July 16, 2018.
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