May 7, 2019 – The Court hearing the Things Remembered (now RMBR Liquidation, Inc.) cases issued an order (ii) approving the Debtors’ Disclosure Statement on an interim basis, (ii) authorizing the Debtors’ proposed Plan solicitation and voting procedures and (iii) scheduling a June 12, 2019 hearing at which the Court is scheduled to approve the Disclosure Statement on a final basis and confirm the Plan [Docket No. 428]. The Debtors also filed a revised version of their Disclosure Statement [Docket No. 431] which includes a blackline showing changes from the version filed on May 6, 2019 [Docket No. 384]. The amended Disclosure Statement does not include any material changes to classes, claims and projected recoveries, an unrevised summary of which appears below.
Overview of the Plan
The Disclosure Statement states, “Generally speaking, the Plan:
- Provides the vesting of all Available Cash from the proceeds of Sales Transactions in the Post-Effective Date Debtors, for the purpose of distribution to holders of Claims;
- Provides for the full and final resolution of funded debt obligations;
- Designates a Plan Administrator to wind down the Debtors' affairs, pay and reconcile Claims, and administer the Plan in an efficacious manner; and
- Provides for 100 percent recoveries for holders of Administrative Claims, Secured Tax Claims, Priority Tax Claims, Other Priority Claims and Other Secured Claims."
That is the palatable part of the Plan description. The part often airbrushed over in favor of the (largely irrelevant to actual creditors) Administrative Claims, etc. is left to the class description. As noted below, classes 5 and 6, which together provided the Debtors with more than $185.0mn, are both left with 0% recoveries.
These classes are deemed to reject and will not be allowed to vote on the Plan. The only voting class is class 4 (“Revolver Claims”) which is set to recover 76.4%.
As previously reported, On March 6, 2019, the Court hearing the Things Remembered cases issued an order authorizing the sale of substantially all of the Debtors' assets to stalking horse bidder Enesco Properties, LLC (“Enesco”) for $17.5mn. Proceeds from the Enesco sale will be used to make payments to holders of the Revolver Claims.
The following is an unchanged summary of classes, claims, voting rights and expected recoveries (defined terms are as defined in the Plan and/or Disclosure Statement):
- Class 1 (“Secured Tax Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. The estimated aggregate amount of claims is $0 and the estimated recovery is 100%.
- Class 2 (“Other Secured Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. The estimated aggregate amount of claims is $0 and the estimated recovery is 100%.
- Class 3 (“Other Priority Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. The estimated aggregate amount of claims is $0 and the estimated recovery is 100%.
- Class 4 (“Revolver Claims”) is impaired and entitled to vote on the Plan. The estimated aggregate amount of claims is $18.7mn and the estimated recovery is 76.4%. The following shall be paid to the Prepetition Agent to be applied toward the Revolver Claims until the Revolver Claims are paid in full: (i) any Available Cash after the funding of the Priority Claims Reserve, the Professional Fee Escrow Account and the Wind Down Amount and the reserve or payment in full of all Allowed Secured Tax Claims and All Other Secured Claims, and (ii) any Reserve Residuals.
- Class 5 (“Term Loan Claims”) is impaired, deemed to reject and not entitled to vote on the Plan. The estimated aggregate amount of claims is $124.9mn and the estimated recovery is 0%.
- Class 6 (“General Unsecured Claims”) is impaired, deemed to reject and not entitled to vote on the Plan. The estimated aggregate amount of claims is $60.3mn and the estimated recovery is 0%.
- Class 7 (“Intercompany Interests”) is impaired, deemed to reject and not entitled to vote on the Plan. The estimated aggregate amount of claims is N/A and the estimated recovery is N/A.
- Class 8 (“Interests in Holdco”) is impaired, deemed to reject and not entitled to vote on the Plan. The estimated aggregate amount of claims is N/A and the estimated recovery is N/A.
Proposed Key Dates:
- Plan Objection Deadline: June 5, 2019
- Voting Deadline: June 5, 2019
- Confirmation Hearing: June 12, 2019
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