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Novation Companies Reorganization Details Approved

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The U.S. Bankruptcy Court approved Novation Companies’ First Amended Disclosure Statement and scheduled a May 31, 2017 hearing to consider the First Amended Joint Chapter 11 Plan of Reorganization, with objections due by May 24, 2017.

As previously reported, “Pursuant to the Purchase Agreement, NHI agreed to purchase from Butler America all of the outstanding capital stock of HCS for $24 million in cash, the Acquisition. The purchase price is subject to a potential working capital adjustment, based on HCS having $5 million of working capital at closing, and the parties have agreed to deposit $240,000 of the purchase price in escrow at closing for a period of six months to secure Butler’s indemnification obligations under the Purchase Agreement.”

In addition, “For Class 2 noteholder claims against Novation, with estimated aggregate claims of $85,937,500, on the Effective Date, the Noteholder Claims and each of the Indentures shall be reinstated pursuant to Bankruptcy Code section 1124. For Class 3a general unsecured claims against Novation, with estimated aggregate claims of $1,145,000, each Holder of an Allowed General Unsecured Claim shall receive, in full and complete satisfaction, settlement and release of and in exchange for such Allowed General Unsecured Claim payment in full over a one-year period, with payments made quarterly, together with interest at the Federal Judgment Rate.”

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