Hello Bello files Chapter 11 plan and disclosure statement

By Sarah Lizee

Olympia, Wash., April 17 – Hello Bello filed a Chapter 11 plan and disclosure statement Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

The company said that following the closing of the $64.9 million asset sale to Hildred Capital Management, the debtors have focused on winding down their businesses, preserving cash held in the estates, monetizing their remaining assets and negotiating a plan settlement.

The remaining assets are expected to consist of, among other things, litigation trust assets, which will include at least $330,000 in cash.

The settlement is between the debtors, the official committee of unsecured creditors, VMG Partners, 36th Street Capital and SCG Capital Corp. The company said that without the settlement, the debtors and their estates would have had to incur substantial professional fees litigating VMG’s right and claim to the debtors’ remaining assets, principally remaining cash proceeds.

The litigation would have materially reduced the funds available to be transferred to the litigation trust for the benefit of unsecured creditors, possibly resulting in insufficient funds to create a litigation trust, the company said.

And, unless VMG’s prepetition subordinated note claims were ordered fully subordinated to general unsecured claims through litigation, a general unsecured claim from VMG would have materially reduced the available funds for distribution to holders of allowed general unsecured claims.

According to the plan, all debtor-in-possession loan claims and prepetition loan claims were paid in full from the sale proceeds.

Priority tax claims, priority non-tax claims and other secured claims will be paid in full.

General unsecured claimholders will receive a pro rata share of the liquidated value of the litigation trust assets.

Subordinated claims will be canceled.

Holders of intercompany claims and interests will receive nothing.

Pacific Palisades, Calif.-based Hello Bello filed Chapter 11 bankruptcy on Oct. 23, 2023 under case number 23-11759.

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