Majestic Capital files liquidation plan, looks to wind down estates

By Caroline Salls

Pittsburgh, Nov. 18 - Majestic Capital, Ltd. filed its plan of liquidation and related disclosure statement Friday with the U.S. Bankruptcy Court for the Southern District of New York.

The company said the plan is designed to facilitate the wind-down of Majestic Capital and the debtors' two non-debtor insurance company affiliates and the resolution of more than 2,000 claims filed in the Chapter 11 cases.

A trust will be established under the plan to liquidate the company's assets, resolve disputed claims and make plan distributions.

Treatment of creditors will include the following:

• Holders of administrative claims and priority tax claims will be paid in full in cash by a liquidating trustee;

• Holders of priority non-tax claims will be paid in cash from any net liquidating trust proceeds;

• Holders of secured claims will either receive the collateral securing their claims, receive the net proceeds from the liquidation of that collateral or have their claims reinstated;

• Holders of non-priority unsecured claims will receive a share of net liquidating trust proceeds after reduction for a distribution reserve; and

• Interest holders will retain their interests but will not receive any distribution unless holders of non-priority unsecured claims are paid in full.

Majestic Capital, a Bermuda-based specialty provider of workers' compensation insurance, filed for bankruptcy on April 29, 2011. The Chapter 11 case number is 11-36225.

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