Peak Web disclosure statement approved; plan hearing set for April 4

By Caroline Salls

Pittsburgh, Feb. 17 – Peak Web LLC received court approval of the disclosure statement for its plan of reorganization, according to an order filed Thursday with the U.S. Bankruptcy Court for the District of Oregon.

The plan confirmation hearing is scheduled for April 4.

The company said the plan establishes a trust to handle assets related to the litigation involving Machine Zone, Inc. Peak had filed a complaint against Machine Zone saying Machine Zone did not pay for services provided by Peak, as previously reported.

Chief restructuring officer Mark Calvert of Cascade Capital Group will be appointed as the initial trustee for the litigation trust. The committee for the litigation trust will consist of three members: chief executive officer Jeffery Papen; one person designated by the lender under the loan entered into in connection with the Machine Zone litigation; and one person chosen by the unsecured creditors committee.

The purpose of the trust is to liquidate the claims and assets assigned to it and distribute the resulting proceeds.

The litigation proceeds will be used to pay expenses of the litigation trust, and then pay allowed unsecured creditor claims, with payment first going to secured creditors in order of priority, then any unpaid administrative expense claims, then priority tax claims, then allowed unsecured claims, until all of those claims have been paid in full, with interest.

Any remaining proceeds will be distributed to holders of the interests in Peak.

Meanwhile, unsecured creditors will be paid 50% of the net profits from future operations of the post-confirmation operating company, consisting of all remaining assets of the company not transferred to the litigation trust.

Peak Web, which does business as Peak Hosting, is a West Linn, Ore., data center. The company filed for bankruptcy on June 13, 2016 under Chapter 11 case number 16-32311.

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