U-Haul Co. of West Virginia statement OK’d; plan hearing Oct. 20

By Sarah Lizee

Olympia, Wash., Aug. 30 – U-Haul Co. of West Virginia received approval of the disclosure statement for its Chapter 11 plan of reorganization from the U.S. Bankruptcy Court for the Southern District of West Virginia, according to an order filed Friday.

The plan confirmation hearing is scheduled for Oct. 20.

As previously reported, the company said the plan is a new-value “pot” plan that provides for the auction sale of the new equity in the reorganized debtor to U-Haul International, Inc. (UHI) or another party that submits a higher and better bid.

The company also received court approval of the bid procedures, and an auction is scheduled for Oct. 20.

Based on the stalking horse bid submitted by UHI, the dividend fund would be $2.5 million. The dividend fund is and will be the only source of payments under the plan for administrative expense claims, priority claims, secured tax claims, general unsecured claims and subordinated penalty claims against the debtor, and all post-petition fees and expenses incurred by the reorganized debtor in the claims administration process.

The reorganized debtor will hold, control and administer the dividend fund and make payments to holders of allowed claims under the plan.

Secured claims will not be paid by the reorganized debtor from the dividend fund, but instead will be paid by the reorganized debtor from post-effective date revenue.

Based on the debtor’s estimates, the dividend fund should be sufficient to pay all administrative expense claims and priority claims in full, and leave a remaining balance of about $1.8 million to pay fees and expenses incurred in the claims administration process and to make pro rata payments to holders of general unsecured claims.

Under the plan, UHI and the debtor have agreed to settle UHI’s $118.13 million unsecured claim against the debtor in exchange for a release of any estate claims that may exist against UHI as of the effective date.

The plan separately classifies and subordinates any claims for punitive damages or penalty claims asserted against the debtor in the two pending lawsuits. Punitive damages or penalty claims only will be paid, if at all, after such claims have been allowed by a final order, and then only on a pro rata basis to the extent that funds remain in the dividend fund after all general unsecured claims have been paid in full.

The company serves do-it-yourself moving and self-storage customers in West Virginia and small parts of Kentucky, Virginia and Ohio. It filed bankruptcy on June 16 under Chapter 11 case number 21-20140.

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