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WL Homes trustee reaches agreement to sell $5.64 million in claims
By Caroline Salls
Pittsburgh, Jan. 10 – WL Homes LLC Chapter 7 trustee George L. Miller requested court approval to sell $5.64 million in claims against Legion Indemnity Co. to Liquidity Solutions, Inc. for $2.09 million, according to a motion filed with the U.S. Bankruptcy Court for the District of Delaware.
Miller said Legion Indemnity is in the process of being liquidated by the Director of Insurance of the State of Illinois in the Circuit Court of Cook County, Illinois County Department, Chancery Division.
According to the motion, the Legion liquidator obtained court approval to make a 16% distribution to claimants in June 2016 and a 22% distribution in December 2017.
The trustee said he negotiated the sale and assignment of the claims to Liquidity Solutions in November in exchange for a payment of $2.09 million.
Under the terms of the sale, WL Homes’ estates will retain the first two distributions received on the claims, as well as the purchase price, regardless of the buyer’s additional recovery from Legion.
According to the motion, the purchase price and first two distributions brings the total recovery by WL Homes’ estates on the claims to roughly 75%.
WL Homes will pay Liquidity Solutions a 1% break-up fee if the bankruptcy court awards the sale of the claims to another party and the transaction with the other party closes.
Also under the sale agreement, if the trustee receives a competing offer by Jan. 24 that is at least $75,000 greater than the proposed purchase price, Liquidity Solutions will be given an opportunity to match the competing offer.
A hearing is scheduled for Jan. 31.
WL Homes, an Irvine, Calif.-based homebuilder, filed for bankruptcy on Feb. 19, 2009. Its Chapter 11 case number is 09-10571.
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