MMFX Technologies' plan confirmed; Fourth Third to provide exit money

By Lisa Kerner

Charlotte, N.C., July 25 - MMFX Technologies Corp.'s first amended joint plan of reorganization was confirmed under scenario B, according to a Monday filing with the U.S. Bankruptcy Court for the Central District of California.

As previously reported, in early May MMFX, its official committee of unsecured creditors, Fourth Third LLC and Investment Funding, Inc. filed a joint plan of reorganization and disclosure statement for MMFX's Chapter 11 bankruptcy case that covered two potential reorganization scenarios.

Because there was no successful bid for the company's assets by the July 22 deadline, the debtors, rather than sell or license their assets, are restructuring under scenario B of the plan under which Fourth Third and Investment Funding would convert their general unsecured claims to equity and provide an amended exit facility of $1.082 million.

MMFX said previously the exit facility would provide a minimum of $1 million to fund payment of general unsecured claims, priority tax claims and priority non-tax claims. The company said this would be enough to make a minimum 60% distribution to general unsecured creditors.

The amount of the exit financing is also negotiable if the exit facility does not allow the general unsecured claims to be paid in full.

Creditor treatment

Treatment of creditors will include:

• Holders of administrative claims, priority tax claims, priority non-tax claims and secured claims will be paid in full;

• Holders of general unsecured claims will be paid using exit financing proceeds under scenario B;

• Under scenario B, Fourth Third and Investment Funding and any other holder of a general unsecured claim that elects equity in lieu of a cash distribution will receive a share of 100% of the new common interests in the reorganized company;

• Intercompany claims will either be reinstated or discharged and extinguished at Fourth Third's discretion under scenario B; and

• Under scenario B, interest holders will receive no recovery.

MMFX, an Irvine, Calif.-based materials science company, filed for bankruptcy on Dec. 14, 2010. The Chapter 11 case number is 10-10083.

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