December 19, 2018 – The Court hearing The Relay Company (f/k/a The Rockport Company) case (i) approved the adequacy of the Debtors’ Combined Disclosure Statement and Chapter 11 Plan of Liquidation; and (ii) confirmed the Plan [Docket No. 664].
On December 17, 2019, the claims agent notified the Court that each of the three voting classes entitled to vote on the Plan…had voted to accept. The voting results were as follows:
- Class 2 (“Prepetition Note Secured Claims against U.S. Debtors”) – 8 claim holders, representing $45,264,775.76 in amount and 100% in number, accepted the Plan.
- Class 4(a) (“General Unsecured Claims against U.S. Debtors”) – 43 claim holders, representing $129,081,753.79 (or 97.64%) in amount and 81.13% in number, accepted the Plan. 10 claim holders, representing $3,121,540.75 (or 2.36%) in amount and 18.87% in number, rejected the Plan.
- Class 4(b) (“General Unsecured Claims against Rockport Canada”) – 23 claim holders, representing $3,345,834.86 (or 97.72 %) in amount and 85.19% in number, accepted the Plan. 4 claim holders, representing $77,982.70 (or 2.28%) in amount and 14.81% in number rejected the Plan.
The following is a summary of claims, classes, voting rights and projected recoveries:
- Class 1(a) (“Other Secured Claims against U.S. Debtors”) is unimpaired, deemed to accept and not entitled to vote on the Plan. Expected recovery is 100%.
- Class 1(b) (“Other Secured Claims against Rockport Canada”) is unimpaired, deemed to accept not entitled to vote on the Plan. Expected recovery is 100%.
- Class 2 (“Prepetition Note Secured Claims against U.S. Debtors”) is deemed impaired and entitled to vote on the Plan. Expected recovery is 26% – 28%.
- Class 3(a) (“Other Priority Claims against U.S. Debtors”) is unimpaired, deemed to accept and not entitled to vote on the Plan. Expected recovery is 100%.
- Class 3(b) (“Other Priority Claims against Rockport Canada”) is unimpaired, deemed to accept and not entitled to vote on the Plan. Expected recovery is 100%.
- Class 4(a) (“General Unsecured Claims against U.S. Debtors”) is deemed impaired and entitled to vote on the Plan. Expected recovery is 0-2%. See below for further on this Class 4 claim.
- Class 4(b) (“General Unsecured Claims against Rockport Canada”) is deemed impaired and entitled to vote on the Plan. Expected recovery is 68-78%. See below for further on this Class 4 claim.
- Class 5(a) (“Intercompany Claims against U.S. Debtors”) is deemed impaired, deemed to reject and not entitled to vote on the Plan. Expected recovery is 0%.
- Class 5(b) (“Intercompany Claims against Rockport Canada”) is deemed impaired, deemed to reject and not entitled to vote on the Plan. Expected recovery is 0%.
- Class 6(a) (“Equity Interests in U.S. Debtors”) is deemed impaired, deemed to reject and not entitled to vote on the Plan. Expected recovery is 0%.
- Class 6(b) (“Equity Interests in Rockport Canada”) is deemed impaired, deemed to reject and not entitled to vote on the Plan. Expected recovery is 0%.
In a footnote to the Class 4(a) claim, the Disclosure Statement notes, “The initial projections contained in the Disclosure Statement were based on the estimated remaining balance of the Wind-Down Reserve Amount following the satisfaction of all senior Claims and any related expenses of the Liquidating Trustee. The Debtors estimated at the time that $246,000 would be available for distribution to the Holders of Class 4 Allowed General Unsecured Claims against the U.S. Debtors following the payment of all senior Claims. This projected recovery, however, was dependent on the Debtors’ estimates as to the aggregate amount of the senior Claims to be paid from the Wind-Down Reserve and was therefore subject to fluctuate upwards or downwards in the event such estimates proved to be incorrect. The amount of the Wind-Down Reserve, however, proved insufficient to cover the actual amount of U.S. Professional Fee Claims, U.S. General Administrative Claims, U.S. Priority Tax Claims and Other Priority Claims against the U.S. Debtors asserted in the Chapter 11 Cases. Accordingly, following a series of good faith negotiations, the Prepetition Noteholders have consented to the additional use of their cash collateral in the manner reflected in the Plan. Pursuant to the terms of the Plan, as revised, the Prepetition Noteholders have agreed to fund a Post-Effective Date Trust Reserve in the amount of $485,000, which, along with any U.S. Litigation Proceeds, can be used to fund a potential distribution to Class 4 Holders of General Unsecured Claims against the U.S. Debtors following the payment of all Liquidating Trust Operating Expenses.”
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