Wave Systems’ Amended Plan of Reorganization became effective, and the Company emerged from Chapter 11 protection. The Court confirmed the Plan on August 25, 2016.
According to documents filed with the Court, “Generally, the Plan provides for the reorganization of the Debtor by retiring, cancelling, extinguishing and/or discharging the Debtor’s existing Equity Interests and issuing New Equity in the Reorganized Debtor to ESW, as the Plan Sponsor and to the extent it exercises the Subscription Option, to ESW, as the Post-Petition Lender. ESW is an entity unaffiliated with the Debtor. In exchange, ESW, as the Plan Sponsor, has agreed to provide Cash Consideration in the amount of $6.875 million which, along with certain litigation recoveries (if any) will ultimately be distributed holders of Allowed Claims and, potentially, Equity Interests in accordance with the priority scheme established by the Bankruptcy Code….Finally, and again, depending on the final reconciled pool of unsecured claims, holders of equity interests in the Debtor may receive a recovery under the Plan. In order to fund the Debtor’s chapter 11 Plan process, ESW as the Post-Petition Lender has loaned funds to the Debtor’s Estate.”
Court-filed documents continue, “The claims of ESW, as the Post-Petition Lender on account of amounts loaned to the Estate after the bankruptcy filing will not be satisfied from the Cash Consideration of $6.875 million, but rather from another source (i.e. the Financial Consideration). In addition, the Plan provides that certain budgeted administrative expenses associated with operating the Debtor and running the chapter 11 process (i.e Ordinary Course Liabilities) will be satisfied from sources other than the Cash Consideration of $6.875 million.”
This digital security provider filed for Chapter 7 protection on February 1, 2016, and the Court converted the liquidation to a reorganization under Chapter 11 on May 16, 2016. Read more bankruptcy news.
The post Wave Systems Bankruptcy Plan Effective appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.