Pipeline Data files plan of liquidation based on global settlement

By Caroline Salls

Pittsburgh, June 18 - Pipeline Data, Inc. filed its plan of liquidation Monday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Pipeline Data reached a global settlement last month that resolves claims in the bankruptcy proceeding and litigation pending in the Supreme Court of New York, paving the way for the Chapter 11 plan of liquidation.

The agreement settles a dispute between Camofi Master LDC, acting as collateral agent for some senior convertible secured notes, as the holder of those notes and as attorney-in-fact for Pipeline Data, Inc. and Cynergy Data, LLC; Comvest Pipeline Cynergy Holdings, LLC; and Pipeline Cynergy Holdings, LLC.

Agreement terms

The settlement calls for the following:

• The Pipeline debtors and defendants will pay Camofi $13.33 million within five business days of the approval of the settlement. The payment represents the $19 million settlement amount, less the amount already paid to Camofi as part of its share of sale proceeds;

• The Camofi plaintiffs will have no obligation to pay any administrative, priority or other claims against the debtors;

• Camofi will dismiss its state court litigation within two days of receiving its payment;

• Camofi will withdraw its motion for substantive consolidation within two days of receiving its payment;

• The settlement of the disputes does not affect Camofi's and Comvest's rights to payment under the notes; and

• The agreement will become void if court approval is not granted before Sept. 1 or if the court declines to approve the settlement.

Pipeline Data closed on the $9.75 million sale of substantially all of its assets to Calpian, Inc. on March 15.

Creditor treatment

Treatment of creditors under the liquidation plan will include the following:

• Administrative expense claims, secured tax claims, priority tax claims and non-tax priority claims will be paid in full in cash;

• Holders of non-insider secured notes claims and insider secured notes claims will be paid in accordance with the global settlement; and

• Holders of general unsecured claims and interests will receive no distribution.

Pipeline Data, a Brashear Falls, N.Y.-based credit card payment processing and merchant services company, filed for bankruptcy on Nov. 19, 2012. Its Chapter 11 case number is 12-13123.

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