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Ignite Restaurant Bankruptcy Plan Filed

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Ignite Restaurant Group filed with the U.S. Bankruptcy Court a Joint Amended Chapter 11 Plan and related Disclosure Statement.

According to the Disclosure Statement, “The Plan is structured as a joint plan. The Debtors will pursue all reasonably available actions to maximize distributions under the Plan to Holders of Claims and Interests….Pursuant to the Settlement, the Lenders and the Committee agreed to, among other things, (A) the establishment of a general unsecured creditor trust, which would receive the first $800,000 of net sale proceeds, in the aggregate, and an upside sharing percentage, on an incremental basis, to the extent the purchase price for assets exceeds $55,000,000; (B) the treatment of avoidance actions and commercial tort claims; (C) the treatment of secured lender deficiency claims and (D) a maximum recovery amount for holders of allowed general unsecured claims.”

In addition, “The Committee and the Lenders also agreed to support the Debtors’ chapter 11 plan so long as the plan is consistent with the terms of the Settlement. The Debtors subsequently approved of and consented to the Settlement, and agreed to seek to distribute the proceeds of the Sale through a plan consistent with the Settlement… Pursuant to the terms of the settlement (and the terms of the Plan), $900,000 of net sale proceeds will be deposited into the GUC Trust as of the Effective Date. Under the Asset Purchase Agreement, Avoidance Actions and Commercial Tort Claims (to the extent the latter are not subject to the Prepetition Liens) will be deposited into the GUC Trust, and the GUC Trust will receive the first $500,000 of aggregate net proceeds recovered from such avoidance actions and commercial tort claims (with net proceeds over and above such $500,000 minimum amount to be shared on a pro rata basis with the Secured Lender Deficiency Claims).”

Read more Ignite Restaurant bankruptcy news.