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Violin Memory disclosure statement and DIP financing OK’d by court
By Caroline Salls
Pittsburgh, March 6 – Violin Memory, Inc. obtained court approval of its disclosure statement and final approval of an $8 million debtor-in-possession facility, according to orders filed Monday with the U.S. Bankruptcy Court for the District of Delaware.
The plan confirmation hearing is scheduled for April 18.
As previously reported, Quantum Partners LP affiliate VM Bidco LLC will sponsor the plan. Investment fund Quantum Partners holds $25.65 million of Violin’s outstanding convertible notes and is managed by Soros Fund Management LLC.
Under the sponsorship agreement, VM Bidco will provide $15 million in cash for recoveries to Violin Memory’s creditors under a plan in which Quantum Partners will receive all equity interests in the reorganized company in lieu of cash for its claims.
VM Bidco will also provide Violin Memory with the $8 million in DIP financing, which will be converted into exit financing.
The plan sponsor will also assume some employee claims and counterparty obligations.
Specified avoidance actions will be preserved for the benefit of unsecured creditors. General unsecured creditors, other than the plan sponsor affiliate, will receive a share of distribution trust interests.
Administrative claims priority tax claims, secured claims and priority non-tax claims will be paid or otherwise satisfied in full.
No distributions will be made on account of any subordinated claims, intercompany claims or equity interests.
On the plan effective date, some company assets will vest in the distribution trust, and the sponsor will make payments to the trust to fund plan distributions.
Santa Clara, Calif.-based Violin Memory develops and supplies computer data storage products. The company filed bankruptcy on Dec. 14 under Chapter 11 case number 16-12782.
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