U.S. Energy Systems files amended plan to distribute proceeds

By Caroline Salls

Pittsburgh, July 2 - U.S. Energy Systems, Inc. filed an amended Chapter 11 plan and related disclosure statement Friday with the U.S. Bankruptcy Court for the Southern District of New York.

Funds for distribution under the amended plan will come from cash on hand, including asset sale proceeds and the proceeds from prosecution of avoidance actions.

In addition, the sale of the company's Biogas assets requires Silver Point to pay administrative claim obligations.

A plan administrator will be appointed to make distributions to creditors from either a plan fund or unsecured distribution fund.

Treatment of creditors under the amended plan will include:

• Holders of secured claims will either be paid in full in cash or receive the collateral securing their claims;

• Holders of administrative claims, priority claims will be paid in full in cash;

• Holders of general unsecured claims will receive a share of an unsecured distribution fund to the extent there is enough money in the fund to justify the distribution; and

• Interest holders will receive no distribution.

Old plan terms

As previously reported, U.S. Energy filed its original plan in August 2008. Under that plan, a liquidating trust was to be established to distribute asset sale proceeds to creditors.

A liquidation trust will be established, and all assets will be transferred to the trust.

The proposed treatment of creditors under the original plan included:

• Holders of administrative claims, third-lien secured claims, secured U.S. Energy Biogas guaranty claims, priority non-tax claims and priority tax claims would have been paid in full in cash;

• Holders of second-lien secured claims would have received $1;

• Holders of general unsecured claims would have received their share of the class A units of the liquidation trust;

• Holders of U.S. Energy Systems, Inc. interests would have received their share of class B units of the liquidation trust; and

• U.S. Energy Overseas Investments, LLC interests would have been cancelled.

The hearing on the amended disclosure statement is scheduled for Aug. 13.

U.S. Energy Systems, a New York-based owner of green power and clean energy and resources, filed for bankruptcy on Jan. 9, 2008. Its Chapter 11 case number is 08-10054.

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