Auto Plus secures conditional approval of disclosure statement

By Sarah Lizee

Olympia, Wash., May 2 – IEH Auto Parts Holding LLC, doing business as Auto Plus, received conditional approval of the disclosure statement for its first amended Chapter 11 plan of liquidation, according to an order filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Texas.

The combined hearing on final approval of the disclosure statement and confirmation of the plan is scheduled for June 1.

As previously reported, the company filed bankruptcy in January with plans to sell its assets.

On the effective date of the plan, an agent will administer the plan and wind down the debtors’ estates.

Under the plan, holders of priority claims are unimpaired.

On the effective date, holders of DIP facility claims will receive 100% of the sale proceeds up to $205 million, and for any sale proceeds above $205 million, 75% of the sale proceeds. DIP facility claimholders will also receive all cash of the debtors and their estates on the effective date in excess of the wind-down budget and the disputed claims reserve.

After the effective date, the DIP facility claimholders will receive, up to the full amount of their claims, all proceeds of the debtors’ accounts receivable in excess of the wind-down budget, all cash of the wind-down debtors at the conclusion of the wind-down transactions, and any other distribution under a settlement term sheet.

Holders of the $170 million of general unsecured claims are expected to receive a 10% recovery. Holders will receive their pro rata share of a $17 million pool.

Holders of equity interests will not receive any recovery.

The Kennesaw, Ga.-based aftermarket auto parts retail chain filed bankruptcy on Jan. 31 under Chapter 11 case number 23-90054.

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