Genuity files liquidation plan; bank lenders to receive 39% to 47% recovery

By Carlise Newman

Chicago, Aug. 26 - Genuity Inc. filed its liquidation plan and disclosure statement with the United States Bankruptcy Court for the Southern District of New York Tuesday.

Under the plan, bank lenders will receive 39% to 47% recovery in the form of class A beneficial interests; $514.2 million of cash; a new $116 million bank tranche; and 68% of residual cash, if any, all to be distributed in accordance with the terms of the bank credit agreement

General unsecured creditors will receive 10% to 35% recovery in the form of pro rata shares of class B beneficial interests in the liquidating trust, consisting of $70 million less reserves and expenses; and 32% of the residual cash.

Stockholders will receive nothing.

Genuity filed voluntary petitions for Chapter 11 bankruptcy protection on Nov.27, 2002, for the purpose of liquidating its assets and distributing the proceeds to creditors. Genuity signed an agreement to sell substantially all of its assets to Level 3 Communications.

Genuity is a Woburn, Mass. IP networking services provider.

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