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CDC seeks approval of $37.5 million in Evolution lawsuit reserves
By Caroline Salls
Pittsburgh, Sept. 26 - CDC Corp. has asked the U.S. Bankruptcy Court for the Northern District of Georgia to establish a plan of reorganization reserve in connection with an Evolution Capital Management, LLC lawsuit in the Supreme Court of the State of New York, New York County, according to a 6-K filed Wednesday with the Securities and Exchange Commission.
The reserve would also cover a proof of claim filed by Evolution in connection with the lawsuit and indemnification demands asserted by former CDC indirect subsidiary CDC Software Corp. and some former officers and directors of CDC and/or CDC Software.
Under the Evolution reserve, $32.5 million would be available to satisfy CDC's obligations to pay Evolution for the proof of claim or any payment tied to any indemnity claims or other indemnity obligations arising from the entry of a judgment of settlement of the lawsuit.
Meanwhile, under a litigation expense reserve, $5 million would be available to satisfy the company's obligations to advance or make payment on any of the indemnity claims for fees and other expenses incurred by any defendant in the Evolution lawsuit.
The company said its second amended plan of reorganization, which was confirmed on Sept. 6, requires the maintenance of distribution reserves for disputed claims.
Under the plan confirmation order, no distribution can be made to holders of equity interests or beneficial interests in a liquidation trust until the reserves are established, CDC said in the 6-K.
A hearing is scheduled for Oct. 16.
CDC, a Hong Kong- and Atlanta-based enterprise software and new media company, filed for bankruptcy on Oct. 4, 2011. Its Chapter 11 case number is 11-79079.
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