Innovative Communication trustee files liquidation plan and disclosure

By Caroline Salls

Pittsburgh, March 23 - Innovative Communication Co., LLC's Chapter 11 trustee filed a plan of liquidation and related disclosure statement for the company Thursday with the U.S. Bankruptcy Court for the District of the Virgin Islands.

The plan was proposed in consultation with principal secured creditor Rural Telephone Finance Cooperative (RTFC).

Trustee Stan Springel said he has sold or otherwise liquidated substantially all of the estates' tangible assets, generating roughly $295 million in cash and credit bid value.

Under the plan, remaining sale proceeds, an RTFC plan contribution and the proceeds of causes of action will be distributed to creditors.

The RTFC plan contribution will be used to pay allowed administrative claims, priority tax claims, gap period claims, priority non-tax claims and statutory fee claims.

In addition, a liquidation trust will be established under the plan to hold and liquidate any remaining assets for the benefit of general unsecured creditors.

The liquidation trust will comprise all remaining unencumbered assets after payment of allowed claims payable from a senior claim reserve and all remaining estate claims and causes of action.

According to the disclosure statement, the bulk of the general unsecured claims are held by the RTFC and by Greenlight entities, including Greenlight Capital Qualified, LP, Greenlight Capital, LP and Greenlight Capital Offshore, Ltd.

Creditor treatment

Treatment of creditors will include:

• Holders of convenience class claims, administrative claims, gap period claims, priority tax claims and priority non-tax claims will be paid in full in cash;

• Holders of parent debtor TIP facility claims will receive a percentage of cash distributions made to holders of beneficial interests until the facility is paid in full or the liquidation trust terminates;

• On account of their secured claims, the RTFC and Global Bank will receive 100% of the net proceeds from the sale of their collateral;

• Holders of general unsecured claims will receive a share of beneficial interests in the liquidation trust, entitling them to cash distributions; and

• Interests will be canceled, and holders will not receive any distribution.

Innovative, a St. Croix, U.S. Virgin Islands, holding company, had an involuntary bankruptcy petition filed against it on Feb. 10, 2006. Its case number is 06-30008.

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