Ingenu receives confirmation of Chapter 11 plan of reorganization

By Sarah Lizee

Olympia, Wash., Dec. 22 – Ingenu Inc.’s Chapter 11 plan of reorganization was confirmed Monday by the U.S. Bankruptcy Court for the Southern District of California.

The plan provides for the reorganization of the debtor through a debt-for-equity exchange transaction through which the debtor’s second most senior secured creditor, NDJR Grid Partners II, LLC, will receive the equity in the reorganized debtor in exchange for the release of NDJR’s pre-petition secured claim, as previously reported.

It also provides for the funding by NDJR of an exit facility that the reorganized debtor will use to make payments due in connection with the confirmation of the plan.

Under the plan, all priority claims and secured tax claims will be paid in full.

The amount of the prepetition first-lien claim will be reduced to the principal amount portion of the prepetition first-lien claim in the amount equal to $86,366.69 on account of outstanding obligations as of the petition date. The reorganized debtor will pay that amount in cash to the prepetition first-lien lender from the proceeds of the exit facility.

The plan treats secured claims that are junior to the pre-petition second-lien claim held by NDJR, specifically the Grid secured claim, the LFT secured claim, the JBJK secured claim, the Gilbert trust secured claim, the Trilliant secured claim and other secured claims as general unsecured claims on the grounds that the allowed amount of the prepetition second-lien claim exceeds the aggregate value of the debtor’s assets.

That treatment is dependent on the court determining, under a motion being separately filed by the debtor, that the secured claims of each of those classes are all valued at zero dollars.

The holders of allowed general unsecured claims will receive pro rata distributions from the creditors’ account to be funded by the reorganized debtor after the effective date during the measuring period from the tax benefit generated during the measuring period in annual payments not to exceed in the aggregate the lesser of $500,000 and 20% of the aggregate actual tax benefit for the measuring period. However, the amount of any annual payment will not exceed $100,000 for any year during the measuring period.

“Tax benefit” is defined in the plan as “any reduction in any liability for income taxes of the reorganized debtor and any subsidiaries for a taxable period beginning after Dec. 31, 2020 as a result of any net operating loss carry forward arising in a taxable period ending on or before Dec. 31, 2020 as reduced by any taxable income recognized by the reorganized debtor or any subsidiaries to the extent attributable to the plan.”

Existing interests will be canceled.

San Diego-based Ingenu develops a wireless machine network that enables long-range connectivity for Internet of Things. The company filed bankruptcy on July 27 under Chapter 11 case number 20-03779.

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