Coldwater Creek Settlement Agreement Filed, Expedited Hearing Sought


Coldwater Creek filed with the U.S. Bankruptcy Court a motion to approve compromise, pursuant to Section 105(a) of the Bankruptcy Code and Bankruptcy Rule 9019, approving Global Settlement Agreement and Release. The compromise motion explains, “Following a period of arms’ length negotiations, which involved substantial concessions by all parties, and in view of the time and expense required to litigate the numerous issues raised by the Committee regarding the Plan, the Term Loan Lenders’ claims and security interests and potential claims and/or causes of actions against the Term Loan Lenders and the Debtors’ directors and officers, the parties have agreed to resolve the issues identified and raised by the Committee pursuant to the terms of the Settlement Agreement. Under the terms of the Settlement Agreement, the Term Loan Lenders’ claims will be reduced by the amount of $4,400,000, and, provided that payment on account of such claims is made on or before July 21, 2014, the Term Loan Lenders will waive all unpaid interest (including PIK interest) that accrued from July 1, 2014 through and including the date of repayment. In the aggregate, the economic value of the Settlement Agreement to unsecured creditors of the Debtors’ estates is estimated to be $5,362,914.55 above the amounts that would otherwise be available for distribution to them. Upon the Effective Date of the Settlement Agreement, the Term Loan Lenders’ claims will be allowed and paid in full and in cash in the amount of $90,739,670.15 (the ‘Agreed Term Loan Lender Claim’), which is $4,400,000 less than the current face amount of the Term Loan Lenders’ claims.” Subsequently the Debtors filed with the Court a motion to shorten notice period for and scheduling expedited hearing on approval of Global settlement agreement and release.

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