Hampshire Group and its official committee of unsecured creditors filed with the U.S. Bankruptcy Court a Joint Chapter 11 Plan of Liquidation and related Disclosure Statement.
According to the Disclosure Statement, “The Plan contemplates the substantive consolidation of the Debtors’ Estates into a single Estate for all purposes associated with Confirmation and Consummation. The Plan further provides for the establishment on the Effective Date of the Liquidation Trust for the primary purpose of administering and liquidating the Trust Assets and for the secondary purposes of, inter alia, (a) analyzing and pursuing Causes of Action; (b) resolving all Administrative Expense Claims, Professional Fee Claims, and Claims; and (c) making all Distributions provided for under the terms of the Plan.”
In addition, “The Liquidation Trust shall be under the direction and control of the Liquidation Trustee, as trustee of the Liquidation Trust, subject to the terms of the Plan and the Liquidation Trust Agreement. On the Effective Date, all Assets of the Debtors’ Estates, including, but not limited to, Causes of Action, any recoveries related to the issuance of the Bond and the related letter of credit draw, certain accounts receivable, any federal or state tax refunds, and Cash, shall vest in the Liquidation Trust….As set forth in the Committee Liquidation Analysis, the Committee estimates that recoveries for Holders of Allowed Claims in Class 2 (General Unsecured Claims) could be between 0.2% and 29% under the Plan. The Committee also believes that Holders of Allowed Claims in Class 2 (General Unsecured Claims) would receive smaller distributions in a liquidation under chapter 7 of the Bankruptcy Code.”
The objection continues, “The Committee Liquidation Analysis provides three alternative scenarios (low, middle, and high) under each of (i) the Plan and (ii) a liquidation under chapter 7 of the Bankruptcy Code, based on various factors in these Chapter 11 Cases.” The Court scheduled a September 13, 2017 hearing to consider the Plan, with objections due by September 6, 2017, and an August 17, 2017 hearing to consider the Disclosure Statement, with objections due by August 2, 2017.
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