Confirmed a plan of reorganization during COVID-19 whereby the Insider provided new value in exchange for 100% of the reorganized Debtor's equity.
Force 10 was retained to provide Chapter 11 bankruptcy financial advisory services to this Debtor struggling to pay an $8mm+ litigation judgment. The case proceeded through the beginning of the COVID-19 pandemic and the Debtor’s business came to a standstill. The Debtor’s sole shareholder proposed a New Value Plan whereby he would retain 100% of the equity by paying more than fair market value, while providing some recovery for pre-petition creditors versus $0 under a Chapter 7 liquidation. Force 10 also marketed the Debtor’s equity, and provided that the sole shareholder’s proposal was highest and best. The Plan of Reorganization was then confirmed.