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Grandparents.com Plan Filed

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Grandparents.com filed with the U.S. Bankruptcy Court a First Amended Joint Plan of Liquidation and related First Amended Joint Disclosure Statement. According to the disclosure statement, “The Lender has agreed to fund the Liquidating Trust with a cash contribution of $200,000 for general trust operations, plus an additional $50,000 specifically earmarked for distribution to Class 3 General Unsecured Claims (i.e., the Plan Fund). The Lender has also agreed to release its lien on the Lender Collateral and subordinate its right to equity distributions to all other shareholders under Class 5 of the Plan. Finally, the Lender has agreed to consensually subordinate its Lender Unsecured Subordinated Deficiency Claim to Class 3 for the first $450,000 of the net proceeds of the Litigation Claims after payment of Lender’s Initial Share of Litigation Claims Proceeds of $300,000 and in exchange for receiving the Lender Release and Injunction. Exhibit D contains four Liquidation Analyses, based upon recoveries on the D&O Claims of (i) $1,000,000; (ii) $5,000,000; (iii) $10,000,000; and (iv) $15,000,000. As is clear from the Liquidation Analyses, the only scenario in which Holders of Class 3 General Unsecured Claims would receive any distribution whatsoever in a Chapter 7 proceeding is if the recovery under the D&O Policies reached the $15,000,000 maximum….The Secured Claim of the Lender in the Allowed amount of $9,188,537.96, which is an aggregate of all amounts due Lender under the DIP Loan Documents ($1,360,916), plus all amounts due under the Prepetition Loan Documents ($9,827,621.96), minus $2,000,000 and is secured by the net proceeds recovered in connection with non-Chapter 5 Litigation Claims and the remaining Trust Assets (collectively, the ‘Lender Collateral’).”