Vesta Holdings receives interim approval of disclosure statement

By Sarah Lizee

Olympia, Wash., March 16 – Vesta Holdings, LLC secured interim approval of the disclosure statement for its Chapter 11 plan of liquidation, according to an order filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

The combined hearing on final approval of the disclosure statement and confirmation of the plan is scheduled for April 21.

The solicitation package was set to be distributed on Friday. Ballots are due by 4 p.m. ET on April 14.

As previously reported, the company gained court approval in January to sell its assets to stalking horse and winning bidder SRA Holdings, LLC, an affiliate of some of the company’s prepetition lenders. The purchase price under the deal is comprised of a $125 million credit bid.

Under the plan, administrative claims, professional fee claims, secured tax claims and other priority claims are unimpaired.

Under the purchase agreement, all DIP claims will be released when the sale closes.

Holders of prepetition lender claims, other secured claims and unsecured claims will receive beneficial interests in the liquidating trust entitling them to pro rata shares of distribution proceeds, if any.

The company notes in the disclosure statement that recoveries for holders of prepetition lender claims, other secured claims and unsecured claims will depend significantly on the value of the liquidating trust assets, including retained causes of action. Vesta said that value isn’t reasonably calculable at this time. Currently, holders of prepetition lender claims and unsecured claims have a projected recovery of zero to 100%, and holders of other secured claims have a projected recovery of zero.

Holders of prepetition lender claims, other secured claims, and unsecured claims are the only ones entitled to vote on the plan.

Intercompany claims and interests will be reinstated, or canceled, released and extinguished with no distribution.

Interests and section 510(b) claims will be canceled with no distribution.

The Montgomeryville, Pa.-based wealth advisory, risk management services and insurance brokerage services company filed bankruptcy on Oct. 30 under Chapter 11 case number 22-11019.

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