Health Diagnostic disclosure statement OK’d; plan hearing March 29

By Caroline Salls

Pittsburgh, Feb. 12 – Health Diagnostic Laboratory, Inc. received court approval of the disclosure statement for its second amended plan of liquidation, according to an order filed Friday with the U.S. Bankruptcy Court for the Eastern District of Virginia.

The plan confirmation hearing is scheduled for March 29.

The company said the plan calls for the distribution of the proceeds from the liquidation of all remaining assets to creditors.

A liquidating trust will be established under the plan, and a liquidating trustee will be responsible for liquidating any assets that have not been liquidated before the plan effective date.

Treatment of creditors will include:

• Administrative claims, priority tax claims and priority non-tax claims will be paid in full in cash;

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

• Holders of general unsecured claims will receive a share of series A liquidating trust interests, which will entitle them to trust distributions until the principal amount of the claims is paid in full and post-bankruptcy interest at the federal judgment rate after the principal amount is paid in full;

• Holders of subordinated claims will receive series B liquidating trust interests; and

• Interest holders will receive series C liquidating trust interests. All interests in one debtor that are held by another debtor will be cancelled without distribution.

Exclusivity extension

In addition, Health Diagnostic requested court approval to extend its exclusive period for soliciting votes on the plan through May 2 from March 3.

Since the confirmation hearing is scheduled for March 29, the company said the exclusive solicitation period would expire during the vote solicitation process and before the confirmation hearing.

As a result, the company said it is requesting the extension to preserve its exclusive period while it solicits votes and attempts to obtain confirmation of the plan.

Health Diagnostic, a Richmond, Va.-based blood testing company, filed for bankruptcy on June 7, 2015. The Chapter 11 case number is 15-32919.

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