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Former Beyond Oblivion: Labels OK cap on $100.8 million in claims
By Caroline Salls
Pittsburgh, July 30 - BEOBI, Inc., formerly Beyond Oblivion Inc., requested court approval of a label claims settlement between the company's official committee of unsecured creditors, Sony Music Entertainment and Warner Music Inc.
The company said Sony filed an $800,000 claim and a $50 million claim based on the terms of a digital download sales agreement. Meanwhile, Warner filed a $50 million claim for amounts allegedly owed under a music download service agreement.
BEOBI said it does not believe that it has received any material benefit from either agreement.
Under the settlement, Sony and Warner have agreed to cap the distributions made to them on account of their claims.
Specifically, the Sony claim will be allowed in the amount of $50.8 million, but distributions will be limited to 30% of net cash sale proceeds available for distribution to general unsecured creditors, plus 25% of a Gee Beyond Holdings LLC (GBH) secured note available for distribution to general unsecured creditors.
Warner's claim will be allowed in the amount of $50 million, but distribution also will be limited to 30% of the net cash sale proceeds and 25% of the secured note.
Absent the settlement, BEOBI said the labels would receive more than 98% of both the cash sale proceeds and the secured note.
According to the motion, the company received $1.95 million in net cash sale proceeds and the $1.5 million secured promissory note from buyer GBH.
A hearing is scheduled for Aug. 21.
Beyond Oblivion, a New York-based digital music company, filed for bankruptcy Jan. 23, 2012. Its Chapter 11 case number is 12-10282.
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