Global Eagle Entertainment files Chapter 11 joint plan of liquidation

By Sarah Lizee

Olympia, Wash., Nov. 13 – Global Eagle Entertainment Inc. filed a Chapter 11 joint plan of liquidation and related disclosure statement Friday in the U.S. Bankruptcy Court for the District of Delaware.

The debtors plan to close the sale of substantially all of their assets for $675 million to an entity established at the direction of holders of 90% of the company’s senior secured first-lien term loans.

The purchaser has also agreed to pay up to $8.5 million in cash in additional sale consideration to be distributed under the plan in lieu of an equal amount of credit bid consideration.

Through funding of the wind-down reserve and the professional fee escrow, the purchaser will pay all amounts necessary to ensure the satisfaction of administrative claims, other priority claims, priority tax claims and professional fee claims.

In addition, the purchaser has agreed to repay and satisfy the DIP financing and related obligations.

Holders of convertible note claims and general unsecured claims will receive their pro rata share of $4 million.

Holders of other secured claims will receive payment in full in cash of the collateral securing their claims.

If second-lien note claimholders vote to accept the plan, they’ll receive in cash their pro rata share of the $1.75 million class 3a additional sale consideration amount, which will not be subject to any right or claim for turnover or recovery under the intercreditor agreement.

If second-lien note claimholders vote to reject the plan, they will receive their pro rata share of the $8.5 million additional sale consideration, provided, however, that all distributions to holders of second-lien note claims will be subject to the terms of the intercreditor agreement, including the turnover and subordination provisions. At the option of the ad hoc DIP and first-lien lender group, all distributions will either be distributed to the first-lien agent or reduce the amount of the additional sale consideration to be paid by the purchaser or funded by retained cash on a dollar-for-dollar basis by the second-lien turnover amount. In no event will the additional sale consideration be less than $4 million.

Section 510 claims, intercompany interests and equity interests will be canceled with no distribution.

Holders of intercompany claims will not receive or retain any property on account of their claims.

A hearing on confirmation of the plan is scheduled for Jan. 26.

Based in Los Angeles, Global Eagle is a provider of media, content, connectivity and data analytics to markets across air, sea and land. The company filed bankruptcy on July 22 under Chapter 11 case number 20-11835.

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