CDC receives court approval of settlement with APOL and equityholders

By Caroline Salls

Pittsburgh, Aug. 16 - CDC Corp. received court approval of a settlement with Asia Pacific On-Line Ltd. (APOL), Nicola Chu Ming Nga, Antony Ren Haw Ip, also known as Antony Yip, and the official committee of equity security holders, according to a Thursday filing with the U.S. Bankruptcy Court for the Northern District of Georgia.

The settlement agreement resolves the dispute regarding the APOL $2.61 options and the APOL restricted stock awards and memorializes the agreement that resulted in the withdrawal of the China.com plan, the motion said.

The terms of the settlement include the following:

• APOL will pay $9 million to the CDC bankruptcy estate. The payment may be withheld from any distribution in the bankruptcy case to APOL on its equity interests, which the debtor and the committee estimate to be roughly 90% of the value of an equity reissuance;

• APOL's equity interests in CDC's bankruptcy case will be allowed and cannot be reduced, subordinated, disallowed, set off or recouped. Those interests consist of 4 million class A common shares, the APOL $2.61 options and APOL RSAs;

• Chu's equity interests will be allowed and cannot be reduced, subordinated, disallowed, set off or recouped;

• If CDC's joint Chapter 11 plan is consistent with the settlement, APOL and Chu will not object to or vote to reject the plan;

• Ip will assist the company and any successor in interest in connection with the sale of CDC's assets; and

• APOL, Chu and Ip cannot dispose of equity interests identified as the only equity interests they have in CDC.

CDC, a Hong Kong- and Atlanta-based enterprise software and new media company, filed for bankruptcy on Oct. 4, 2011. Its Chapter 11 case number is 11-79079.

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