LSC Communications receives confirmation of amended liquidation plan

By Sarah Lizee

Olympia, Wash., Feb. 25 – LSC Communications, Inc.’s amended joint Chapter 11 plan of liquidation was confirmed by the U.S. Bankruptcy Court for the Southern District of New York, according to an order filed Wednesday.

A key element of the amended plan is the settlement of various potential causes of action against R.R. Donnelley & Sons Co. The settlement effectively eliminates R.R. Donnelley’s significant claims against the debtors’ estates as well as causes of action held by the participants in the LSC unfunded supplemental pension plan (SERP) against both R.R. Donnelley and the debtors’ estates.

As a result of the settlement, R.R. Donnelley is contributing almost $5 million for distribution to SERP participants, funding roughly $2.6 million into a multi-employer pension plan (MEPP) distribution account, and waiving all of its claims against the debtors’ estates. Additionally, through the settlement, $1 million previously set aside to fund causes of action against R.R. Donnelley can now be distributed to the debtors’ unsecured creditors.

Distributions under the plan will be funded from cash on hand, wind down cash proceeds, and any other plan assets. If the conditions of the settlement with R.R. Donnelley are satisfied, distributions will also be funded from the settlement payments.

Under the plan, holders of other priority claims will receive payment in full in cash.

Holders of other secured claims will receive payment in full in cash or the collateral securing their claims.

Holders of junior remaining claims will receive their pro rata share of the junior remaining claim distribution pool, subject to the unsecured claim pool.

Holders of general unsecured claims will receive their pro rata share of the unsecured claim pool and their pro rata share of the litigation trust interests if the R.R. Donnelley settlement conditions are satisfied. Otherwise, holders will receive their pro rata share of the unsecured claim pool, provided that all distributions to holders of MEPP RRD claims will be made by the plan administrator only from the MEPP distribution account, which will be funded by R.R. Donnelley under the terms of the settlement.

Holders of SERP claims will receive their pro rata share of the unsecured claim pool and the SERP settlement payment if the R.R. Donnelley settlement conditions are satisfied. Otherwise, holders will receive their pro rata share of the unsecured claim pool and the litigation trust interests.

Intercompany claims will be canceled, released or otherwise settled in full.

Intercompany interests, subordinated claims and equity interests in LSC will be canceled with no distribution.

LSC is a Chicago-based provider of digital print, print-related services and office products. The company filed bankruptcy on April 13 under Chapter 11 case number 20-10950.

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