Bankruptcy News

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Bankruptcy/Chapter 11

AgFeed Industries Plan Filed

AgFeed Industries filed with the U.S. Bankruptcy Court an Amended Chapter 11 Plan of Liquidation and related Disclosure Statement. According to the Plan, “The Plan provides for substantive consolidation of the Consolidated AgFeed USA Debtors and the liquidation of the Debtors’ assets. The majority of the debtors’ assets have been liquidated pursuant to the AgFeed USA Sale and the AgFeed Industries Stock Sale. The Plan further provides for the Estates’ Assets to be allocated in accordance with the terms of the Plan and distributed to holders of the Allowed Claims and Interests. On the effective date, all of the Estates’ assets will vest in and be transferred to the Liquidating trust. The liquidating trust shall be administered by the Liquidating trustee who shall, among other things, liquidate the remaining Estates’ Assets, resolve any disputed claims, wind-down the affairs of the Debtors, and make initial and final distributions pursuant to the Plan. The Plan incorporates a settlement, by and between the Debtors and the Plan supporter which provides for the SEC and class plaintiffs to contribute all or portion of their respective allowed claims to the liquidating trust for distribution in accordance with the plan. More specifically, the Plan provides that, on the effective date of the plan, the SEC, in full and final satisfaction of any and all claims (including its proof of claim) or cause of action it has or may have against any of the Debtors, shall have an allowed claim in the amount of $18 million payable from the AgFeed Industries net distributable cash which the SEC shall immediately contribute to the Liquidating Trust, with $12.5 million designated for distribution to the holders of Class 5B interests and $5.5 million designated for the Plan Fairness Fund established under the Plan….On the effective date, the Class plaintiffs shall receive, in full and final settlement of any and all claims or causes of action against the Debtors or any defendant in the class action litigation, an allowed claim in the amount of $7 million, approximately $3.15 million of which shall be paid from the AgFeed Industries Net Distributable cash and approximately $3.85 million of which shall be paid from available insurance proceeds. The class plaintiffs’ counsel shall be entitled to payment of legal fees and expenses in connection with the Class Action Litigation in an amount up to $1.75 million payable from the allowed class plaintiff’s claim. The class plaintiff shall immediately contribute the balance of the $7 million, (an amount of at least $5.25 million), to the Plan Fairness Fund for distribution in accordance with the Plan Fairness Fund Distribution Procedures.”

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