Former OCZ Technology seeks OK of settlement of $6.5 million claim

By Kali Hays

New York, March 19 - ZCO Liquidating Corp., formerly known as OCZ Technology Group Inc., is seeking approval of a settlement agreement it reached with Hercules Technology Growth Capital Inc. and the unsecured creditors committee resolving a $6.5 million claim, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

Hercules filed its claim against ZCO on March 3 asserting secured claims in the amount of $6.5 million.

The settlement was reached in order to "to avoid the expense, delay, and risk associated with the prosecution of a claim objection or cause of action against Hercules," the filing stated.

Under the agreement, Hercules will be allowed one claim of $25,000 related to its non-subordinated pre-bankruptcy senior loan and will repay a $125,000 senior lender first-lien payoff and a $200,000 challenge reserve.

The $6.5 million subordinated pre-bankruptcy claim will be allowed, but subordinated to all other claims.

A liquidation trust in the minimum amount of $325,000 will be funded if ZCO's liquidation plan is confirmed. Hercules also agreed to support ZCO's plan upon solicitation.

A hearing is scheduled for April 14.

OCZ, a Sunnyvale, Calif.-based producer of computer memory and components, filed for bankruptcy on Dec. 2. The Chapter 11 case number is 13-13126.

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