Juno USA reaches settlement that clears path for plan confirmation

By Caroline Salls

Pittsburgh, Feb. 14 – Juno USA, LP requested court approval of a settlement of driver claims and a support agreement reached with Chapter 11 plan sponsor GT Gettaxi Ltd., former Juno drivers, the official committee of unsecured creditors appointed in Juno’s case and driver claimants’ counsel Held & Hines LLP, according to a motion filed Friday with the U.S. Bankruptcy Court for the District of Delaware.

Juno said the driver claimants filed a lawsuit in New York state court before the company’s bankruptcy filing, asserting claims related to the termination of former Juno USA parent Juno, Inc.’s restricted stock units wage and claim litigation.

The driver claimants also asserted claims of fraud, fraudulent inducement, false advertising, breach of contract, breach of implied covenant of good faith and fair dealing, unjust enrichment, promissory estoppel and violation of NY WARN Act,” the motion said.

Although all but the unjust enrichment claims have been dismissed, the company said appeals of the dismissal order are pending.

Juno said the parties have been in negotiations over the last several weeks to resolve all issues related to the driver claims, the committee’s objection to the company’s debtor-in-possession financing, discovery requests, Juno’s Chapter 11 plan and related disclosure statement and objections to those documents.

“The settlement agreement provides a consensual resolution among the parties and provides a consensual path for these Chapter 11 cases to proceed through confirmation of the plan,” the motion said.

Under the proposed settlement, Juno will file an amended plan that specifies that the plan sponsor contribution will be comprised of the amount of allowed DIP facility claims plus $875,000.

However, $37,500 of that amount will be contributed by the Juno debtors to the extent they have cash on hand as of the plan effective date.

The sponsor contribution will be distributed to holders of all allowed DIP facility claims and all outstanding allowed administrative claims, priority tax claims and other priority claims not otherwise paid from the proceeds of the DIP facility in the amount of $100,000.

In addition, $775,000 of the contribution will go to a settlement trust.

The sponsor agreed to pay all administrative and priority claims that exceed $100,000 and are not otherwise paid from the DIP facility proceeds.

Committee retained professional fees will be capped at $375,000. Any fee amounts that exceed $300,000 will be paid in equal parts from the DIP facility and Juno’s cash on hand.

All driver claims will be classified as general unsecured claims under the amended plan and will be allowed in the amount of $1,000 solely for purposes of voting. These claims will not be subject to objection by the company or the plan sponsor, with the right to object being reserved solely for the settlement trustee.

The company has requested a Feb. 20 hearing.

Juno was a New York-based rideshare service. The company filed bankruptcy on Nov. 19 under Chapter 11 case number 19-12484.

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