Open Road Films, creditors committee eye approval of lender settlement

By Sarah Lizee

Olympia, Wash., May 24 – Open Road Films, LLC and its official committee of unsecured creditors requested court approval of a settlement reached with Open Road’s prepetition secured lenders, according to a motion filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

Bank of America, NA is agent for the lenders.

The committee said that while it has not commenced any proceedings, the debtors’ estates have valid potential claims against the lenders that must be asserted before the challenge deadline, which has been extended to May 28.

The motion said the settlement agreement allows the debtors and their estates to avoid litigation with the prepetition secured parties over adequate protection and related issues and permits the debtors and the committee to promptly wrap up these cases.

“This is especially valuable as, absent the settlement agreement, these cases will continue, with ongoing costs and expenses, which would dissipate the funds available for creditors,” the motion said.

“Lastly, the prepetition secured parties – who hold a potentially large unsecured deficiency claim – have agreed not to participate in substantially all of the recoveries earmarked for other creditors.”

According to the motion, proceeds from the settlement will be used to fund distributions under the plan of liquidation.

Under the proposed settlement, the prepetition secured parties would allocate to the debtors’ estates $7,609,000 of the debtors’ estate sale proceeds, the $400,000 Playmobil purchase price and up to $25,000 of proceeds from any sale or other disposition of the property known as “the tank.”

A June 3 hearing has been requested.

Open Road is a Los Angeles-based film operation. The company filed bankruptcy on Sept. 6, 2018 under Chapter 11 case number 18-12012.

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