4Licensing Bankruptcy Plan Effective, Summarized


4Licensing’s Combined Chapter 11 Plan of Reorganization and Disclosure Statement became effective, and the Company emerged from Chapter 11 protection. The U.S. Bankruptcy Court confirmed the Plan on January 20, 2017.

BankruptcyData’s detailed Plan Summary notes, “The Plan is premised on the Debtor issuing New Common Stock in exchange for Allowed Secured Claims and cash, and the Buyer (Mr. Frohlich) will purchase 38,327 shares of the New Common Stock for the total purchase price of $462,673 that represents 38.3% of the New Common Stock. Mr. Frohlich’s purchase of New Common Stock for cash will be the source of payments to holders of Class 1, 2, 3 and 4 under the Plan. Mr. Frohlich is the founder of Prescott Group Capital Management, LLC, an investment company for high net worth investors, and has served as its managing partner since 1993.”

BankruptcyData’s Plan Summary continues, “The Liquidation Analysis for Reorganized 4Licensing Corporation estimates the Net Proceeds Available to Creditors to be between $17,143 and $525,000. The recovery rate to the Rudd Secured Debt is estimated to be between 17% and 100%. The recovery rate to the Prescott Secured Debt is estimated to be between 0% and 23%.”

This licensing and technology provider filed for Chapter 11 protection in September 2016, listing $3.6 million in pre-petition assets.

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