Penson Worldwide says plan of liquidation became effective Aug. 15

By Jim Witters

Wilmington, Del., Aug. 16 - Penson Worldwide, Inc.'s fifth joint amended plan of liquidation went effective on Aug. 15, according to an Aug. 16 filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the plan was confirmed by the court on July 31.

The plan calls for the formation of a new company, Penson Technology LLC, which will receive all the assets of the debtors for liquidation. The new company will be overseen by a board of managers and a chief officer.

The proceeds of the liquidation will be segregated by debtor and distributed to the creditors for each debtor entity.

A liquidation trust will handle disbursements to Penson's domestic subsidiaries.

Creditor treatment

Treatment of creditors under the plan includes the following:

• Administrative expense claims, priority tax claims and non-tax priority claims will be paid in full in cash;

• Holders of other secured claims will either be paid in full in cash or receive the collateral securing the claims;

• Holders of general unsecured claims against Penson Worldwide and convertible note claims will receive a share of class B units, payable from the company's net distributable assets;

• Holders of second-lien note claims will receive a share of class A units, payable from the company's net distributable assets;

• Holders of securities law claims and equity interests will receive no distribution, provided, however, that, to the extent that asset recoveries exceed expectations in an amount that would permit a distribution to these creditors, that amount would be distributed to the liquidating trust as the holder of class D units for the benefits of the securities law claimants after payment in full of all holders of class A, class B and class C units;

• Holders of general unsecured claims against other debtors will receive a share of beneficial interests in a creditor sub-trust, entitling it to net distributable assets of the applicable debtor; and

• Holders of equity interests in other debtors will receive no distribution, provided, however, that to the extent that asset recoveries exceed expectations in an amount that would permit a distribution, one would be paid to the estate and distributed in accordance with the plan after payment of specified other claims.

Dallas-based Penson Worldwide provides securities execution, clearing, custody, settlement and technology infrastructure products and services to financial services firms. The Chapter 11 case number is 13-10061.

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