Digerati: No distribution for common stockholders from Dishon sale

By Caroline Salls

Pittsburgh, July 7 – Digerati Technologies, Inc. does not expect to receive any of the proceeds from the sale of its 100% equity interest in Dishon Disposal, Inc. for distribution to common stockholders, according to an 8-K filed Monday with the Securities and Exchange Commission.

As previously reported, the $27 million sale of the Dishon interest to Buckhorn Disposal, LLC was approved on July 1 by the U.S. Bankruptcy Court for the Southern District of Texas.

Digerati said in the 8-K that the net proceeds from the sale will be used for payment of professional fees that are allowed administrative expenses and unsecured creditors, up to a maximum of $1.25 million plus 50% of the professional fees entitled to payment as an administrative claims, as well as for payment of debt secured by the equity interests in Dishon, up to a maximum of $30 million.

The company said 6/7th of any balance will be used for distributions to the holders of series A preferred stock and 1/7th of the balance for distributions to the holders of the reorganized company’s common stock.

However, based on the purchase price, Digerati said it does not expect to receive proceeds for distribution to holders of the reorganized company’s common stock.

Digerati is a Stafford, Texas, diversified holding company with operating subsidiaries in the oil field services and cloud communications industries. The company filed for bankruptcy on May 30, 2013 under Chapter 11 case number 13-33264.

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