Liberty Medical amended plan disclosure OK’d; confirmation June 16

By Kali Hays

New York, May 7 – Liberty Medical Supply, Inc. received approval of the disclosure statement related to its amended Chapter 11 plan of liquidation on Thursday from the U.S. Bankruptcy Court for the District of Delaware.

A hearing to confirm the plan is set for June 16.

As previously reported, the amended plan alters the treatment of general unsecured creditors, who will now receive payment in cash of an allowed claim plus interest at a yearly rate of 1½% until the claim is paid in full.

Under the initial plan, general unsecured creditors were to receive a beneficial interest in a share of the liquidating trust assets.

In addition, as a result of a settlement with Medco Health Solutions, Inc., holders of allowed Medco claims will receive a share of liquidating trust assets after all other claims have been paid in full, according to the disclosure statement.

All proceeds from company asset sales and settlements will be placed into a liquidating trust to allow for creditor distributions.

The company closed a sale of substantially all its assets in November to Liberty Medical, LLC for $32.5 million in cash and the assumption of up to $35.96 million in liabilities.

Treatment of remaining creditors is unchanged and includes the following:

• Secured claims will either be paid in full in cash or holders will receive the proceeds from the sale of the corresponding collateral or receive the collateral itself;

• Administrative claims, priority tax claims, non-tax priority claims and U.S. trustee fee claims will be paid in full; and

• Holders of equity interests will receive a share of the liquidating trust assets after payment in full in cash of all other allowed claims and payment of post-bankruptcy interest to general unsecured creditors.

Liberty Medical, a Port St. Lucie, Fla.-based health-care products home delivery provider, filed for bankruptcy on Feb. 15, 2013. The Chapter 11 case number is 13-10262.

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