Former Carla’s Pasta Chapter 11 plan effective as of Aug. 17

By Sarah Lizee

Olympia, Wash., Aug. 18 – Old CP, Inc.’s, formerly Carla's Pasta, Inc., Chapter 11 plan went into effect on Tuesday, according to a notice filed with the U.S. Bankruptcy Court for the District of Connecticut.

The plan was confirmed on Aug. 2, as previously reported.

According to the amended disclosure statement, the debtors’ lenders, People’s United Bank, NA and BMO Harris Bank NA, and official committee of unsecured creditors are serving as plan sponsors.

The plan contemplates an orderly liquidation of the debtors’ assets via a liquidating custodian.

There is an adversary proceeding between Dennis Group and the lenders. The lenders’ secured claim against debtor Suri Realty is secured by a lien on substantially all of Suri’s assets, including the cash proceeds from the sale of substantially all of the debtors’ assets. Dennis Group has challenged the allowance and priority of the lenders’ claim, which is the subject of the dispute.

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

Creditors will receive treatment based in which debtor their claim relates to.

For classes in the Carla’s Pasta case:

• Holders of the lenders secured claim will receive distributions of all of the remaining cash and assets of the debtors, less amounts paid or reserved for payment of administrative expenses, priority claims, other secured claims, the unsecured creditors’ fund, and wind down funds;

• Holders of general unsecured claims will receive their pro rata share of the unsecured creditors’ fund any other assets after the effective date that will be liquidated to cash that is not subject to the lenders secured claim; and

• Equity interests will be canceled with no distribution.

For classes in the Suri Realty case:

• If the lenders’ secured claim is allowed, holders will receive distributions of all of the remaining cash and assets of the debtors, less amounts paid or reserved for payment of administrative expenses, priority claims, other secured claims, the unsecured creditors’ fund, and wind down funds;

• Dennis Group’s claim is impaired and disputed under the plan. If its claim becomes an allowed claim, whether the holder receives any distribution will be determined by the outcome of the Dennis Group and lender disputes;

• It is not anticipated that the holders of general unsecured claims will receive any distributions under the plan, but the ultimate treatment will depend on the outcome of the Dennis Group and lender disputes; and

• Equity interests will be canceled with no distribution.

The South Windsor, Conn.-based pasta manufacturing company filed bankruptcy on Feb. 8, 2021 under Chapter 11 case number 21-20111.

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