KiOR emerges from bankruptcy with reorganization in effect June 30

By Kali Hays

New York, July 1 – KiOR, Inc.’s second amended plan of reorganization became effective on June 30, according to a Wednesday notice with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the court confirmed the plan on June 9.

The plan calls for the establishment of a liquidating trust, which will be funded by cash, the transfer of claims and causes of action belonging to the estate.

Also under the amended plan, holders of first- and second-lien claims will be deemed to have waived the right to receive any distributions from the KiOR estates on account of their claims.

Treatment of creditors under the plan will include the following:

• Holders of DIP financing claims will receive equity in the reorganized company;

• Holders of secured tax claims will receive quarterly payments, beginning 30 days after a plan effective date, for a period of five years from the effective date;

• Holders of priority employee claims will receive deferred cash payments;

• Holders of trade claims will receive a cash payment equal to 50% of the allowed claim, as well as the treatment afforded for general unsecured creditors and a waiver of Chapter 5 causes of action against them. These creditors must vote to approve the plan to receive the continuing trade creditor treatment;

• Holders of convenience claims will receive a cash payment equal to 50% of their claims, with a total cap for the class of $75,000, or claimants can opt to be treated as general unsecured creditors;

• Holders of first- and second-lien claims will be deemed to have waived their right to any distributions;

• Holders of third-lien claims will receive a share of liquidating trust distributions as if they were holders of general unsecured claims, but any amounts they receive will go to holders of second-lien claims under a subordination agreement;

• Holders of general unsecured claims will receive a share of liquidating trust distribution; and

• Holders of equity interests and subordinated claims will receive no distribution.

KiOR is a Pasadena, Texas-based development-stage, next-generation renewable fuels company that filed for bankruptcy on Nov. 10, 2014. The Chapter 11 case number is 14-12514.

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