The U.S. Bankruptcy Court approved Appvion's motion to extend the exclusivity period for filing a plan and soliciting acceptances thereof through and including May 29, 2018 and July 27, 2018, respectively. As previously reported, "The Debtors have continued in their negotiations with all key stakeholders since the Petition Date, with the expectation that they will bring forward a consensual plan almost immediately following the sale of their assets. Indeed, it would be imprudent and premature to formulate and file a liquidation plan before the Sale Process has been completed and the sale has been consummated. The Debtors will be in a better position to formulate a plan of liquidation and provide their creditors and the Committee with adequate financial information such that creditors may cast an informed vote on such plan once the sale has been consummated….The Debtors are not seeking a further extension of exclusivity to delay the administration of these cases or to pressure creditors into acceding to a plan that they find unsatisfactory. Instead, the Debtors seek this further extension of exclusivity to ensure that the Debtors and their constituents have ample opportunity to complete the Sale Process and formulate and negotiate a plan beneficial to all constituencies and for the Debtors to garner the support of their creditors."
The U.S. Bankruptcy Court issued an order approving Bon-Ton Stores' motion for the sale of property free and clear of liens; approving certain bidding procedures, assumption and assignment procedures and the form and manner of notice thereof; approving the asset purchase agreement (APA) and authorizing the sale of all or substantially all of the Debtors' assets free and clear of all encumbrances. According to a corporate release, the approved APA is between the Company and a joint venture composed of the holders of the Company's 8.0% Second Lien Secured Notes due 2021 and Great American Group and Tiger Capital Group. Under the APA, the joint venture group will acquire the inventory and certain other assets of the Company. The joint venture was the winning bid in an auction held pursuant to Section 363 of the U.S. Bankruptcy Code. The release notes, "The Company is committed to working constructively with the winning bidder to ensure an orderly wind-down of operations that minimizes the impact on associates, customers, vendors and the communities we serve. The Company's stores, e-commerce and mobile platforms under the Bon-Ton, Bergner's, Boston Store, Carson's, Elder-Beerman, Herberger's and Younkers nameplates will remain open throughout the store closing sales."
The U.S. Trustee assigned to the Cenveo case filed with the U.S. Bankruptcy Court an objection to Cenveo's Disclosure Statement. The Trustee asserts, "The Disclosure Statement should not be approved because it fails to provide creditors with sufficient information to allow them to make an informed choice as to whether to approve or reject the Debtors' Joint Chapter 11 Plan of Reorganization (the 'Plan')….The Disclosure Statement should contain additional information explaining why the Plan treats two different classes as unimpaired despite the fact that under the Plan the legal rights of each such class' members may be altered. Simply put, although the Debtors list Classes 1 and 2 as unimpaired, both classes are deemed to consent to third-party releases unless they separately opt out."
The U.S. Bankruptcy Court approved COPSync's motion to extend the exclusive period during which the Company can file a Chapter 11 plan and solicit acceptances thereof through and including April 29, 2018 and June 26, 2018, respectively. As previously reported, "The Debtor and Debtor's counsel have made strides in the plan process and foresee being able to file the proposed plan and disclosure statement within the time requested herein. Some negotiations with creditor's counsel, particular those that are claiming administrative expenses, require additional time to resolve prior to the filing of the proposed plan and disclosure statement. Additionally, the Debtor is still in the process of reconciling its post-sale payables, and the buyer of the Debtor's assets has not yet fully funded the initial $600,000 sale proceeds. More certainty is needed with respect to the remainder of that payment prior to finalizing the proposed plan and disclosure statement. Finally, although the Debtor has done its best to estimate potential governmental claims, the Debtor believes there is a benefit in waiting until the governmental units claim bar date passes on March 28, 2018, so that it can provide better information to all creditors regarding the scope and classification of the claims against it."
Tops Holding II filed with the U.S. Bankruptcy Court a motion for entry of an order approving the Debtors' (i) key employee incentive plan (KEIP) and (ii) key employee retention plan (KERP). The motion explains, "The Debtors' management personnel and certain other employees (collectively, the 'Key Employees') are critical to the Debtors' ability to achieve these objectives, successfully reorganize and, among other things, to preserve the going-concern value of the Debtors' businesses and maximize creditor recoveries. However, prior to and since the Commencement Date, there has been a high degree of uncertainty among the Debtors' Key Employees as to their job security, the future of the Debtors' business enterprise and, in view of these circumstances, whether they should be seeking other opportunities....To address these circumstances and properly incentivize the Debtors' employees and senior management to work toward a value-maximizing restructuring, the Debtors worked extensively with their advisors, including Towers Watson Delaware Inc. ('Willis Towers Watson'), the Debtors' independent compensation consultant, to develop two narrowly-tailored programs: (i) a key employee retention plan (the 'KERP') for 115 Key Employees (the 'KERP Participants'), which provides for the payment of fixed cash amounts in two instalments, and (ii) a key employee incentive plan (the 'KEIP' and, together with the KERP, the 'Employee Programs') for five (5) members of the Debtors' senior management team who are Key Employees (the 'KEIP Participants'), which provides for three quarterly cash payments only if the Debtors achieve certain incentive-based performance metrics. The aggregate maximum award under the KERP for the KERP Participants is approximately $3.2 million, with an additional discretionary pool of approximately $300,000. The aggregate maximum potential award under the KEIP for the three quarters is approximately $3.6 million distributed among the KEIP Participants, but again, based on the achievement of performance metrics that will inure to the benefit of all of the Debtors' economic stakeholders." The Court scheduled a May 10, 2018 hearing on the motion.