Madison Square Boys & Girls Club’s plan hearing moved to July 28

By Sarah Lizee

Olympia, Wash., July 14 – Madison Square Boys & Girls Club, Inc.’s combined hearing on confirmation of its Chapter 11 plan of reorganization and final approval of the related disclosure statement was moved to July 28 from July 17, according to a notice filed Friday with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, the plan was accepted by both voting classes. Specifically, nine holders, or 90% in number, of $53,513.69, or 99.998% in amount, of general unsecured claims voted to accept the plan, while one holder, or 10% in number, of $1.00, or 0.002% in amount, voted to reject the plan.

And, 122 holders, or 96.83% in number, of $122.00, or 96.83% in amount, of abuse claims voted to accept the plan, while four holders, or 3.17% in number, of $4.00, or 3.17% in amount, voted to reject the plan.

The plan incorporates a settlement reached with the official committee of unsecured creditors and holders of abuse claims.

Among other things, the plan provides that all abuse claims asserted against the debtor and other covered parties will be channeled to the compensation trust on the effective date.

The trust will be funded with $2.23 million in cash, a $5.4 million interest-bearing promissory note, the right to 100% of the net proceeds generated from the sale of the debtor’s Navy Yard Clubhouse, 100% of excess exit cash (if any), an assignment of the Madison damages claims and the proceeds thereof, assignment of the debtor’s rights, claims, interests, and benefits under or with respect to the abuse insurance policies, and the compensation trust causes of action.

A trustee will distribute the proceeds of the compensation trust assets equally to all holders of allowed abuse claims and pursue the compensation trust causes of action and Madison damages claims.

The debtor estimates that the total value of the compensation trust assets to be funded to the trust on the effective date is between $15.1 million and $21.2 million before taking into account the proceeds of any causes of action, other than reimbursement of defense costs, or the availability of insurance proceeds.

Upon the occurrence of the effective date, all holders of abuse claims will be forever enjoined from pursuing recoveries on account of any abuse claims from the debtor, the reorganized debtor, and the other covered parties through the channeling injunction and, instead, will be able to look to the compensation trust in their place.

Other secured claims and other priority claims are unimpaired under the plan.

Holders of general unsecured claims will receive their pro rata share of a $300,000 cash pool.

The not-for-profit membership interests will be reinstated.

The New York-based non-profit after-school program provider filed Chapter 11 bankruptcy on June 29, 2022 under case number 22-10910.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.