KServicing general unsecured creditor class rejects plan

By Sarah Lizee

Olympia, Wash., March 10 – Kabbage, Inc., which does business as KServicing, reported the voting results for its Chapter 11 plan of liquidation in a tabulation summary filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

The one holder of $536.45 million of Reserve Bank claims against KServicing, $1.00 of Reserve Bank claims against Kabbage Canada Holdings, LLC, $1.00 of Reserve Bank claims against Kabbage Asset Securitization, LLC, $1.00 of Reserve Bank claims against Kabbage Asset Funding 2017-A, LLC, $1.00 of Reserve Bank claims against Kabbage Asset Funding 2019-A, LLC and $1.00 of Reserve Bank claims against Kabbage Diameter, LLC voted to accept the plan.

The plan was rejected by the general unsecured claims class. Specifically, 18 holders, or 39.13% in number, of $504,957.42, or 33.7% in amount, voted to accept the plan, while 24 holders, or 52.17% in number, of $993,562.25, or 66.3% in amount, voted to reject the plan.

The confirmation hearing is scheduled for March 13.

The Chapter 11 plan of liquidation addresses two potential scenarios. In the first scenario, the plan provides for the servicing of the company’s loan portfolio throughout the Chapter 11 cases.

Alternatively, if the debtors are unsuccessful in securing funding through negotiations with the federal reserve and Customers Bank in the early days of the Chapter 11 cases, and thus are unable to service the loan portfolio for the duration of the Chapter 11 cases, the plan provides for (a) the rejection of the servicing agreements with the partner banks, and (b) servicing its PPP liquidity facility portfolio, and on the contemplated plan effective date, the debtors will transfer the PPP liquidity facility collateral to the Federal Reserve in satisfaction of its claims.

Under the plan, holders of administrative expense claims, fee claims, priority tax claims and priority non-tax claims will be paid in full.

Holders of other secured claims will receive payment in full in cash, the collateral securing their claims or other treatment that will render the claims unimpaired.

Holders of general unsecured claims will receive their pro rata share of the general unsecured creditor pool class B claims, or their pro rata share of the general unsecured creditor trust beneficial B interests, depending on if a funded transaction occurs.

Holders of intercompany claims, intercompany interests, subordinated securities claims and equity interests will receive no distributions.

The Atlanta-based servicer and subservicer of small business Paycheck Protection Program loans filed bankruptcy on Oct. 3 under Chapter 11 case number 22-10951.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.