BEOBI plan of liquidation receives approval, creditors settle claims

By Sahara Marte

New York, Aug. 21 - BEOBI Inc., formally Beyond Oblivion Inc., received court approval for its proposed plan of liquidation on Tuesday during a hearing at the United States Bankruptcy Court for the Southern District of New York.

The plan of liquidation had no objections and had a unanimous approval of 17 ballots, according to debtors' attorney, Gerard Catalanello, partner of Duane Morris LLP.

Judge Allan Gropper made several adjustments to the plan, eliminating minor paragraphs and altering some of the plan's wording. A trust advisory board has not yet been formed, but will assemble in the upcoming weeks, as the plan states.

"This was a well administered case," Gropper told the court.

In addition, the judge approved BEOBI's request for a labels claim settlement with its official committee of unsecured creditors, Sony Music Entertainment and Warner Music Inc.

"Debtors will be making principal payments consistent with the plan," said Committee's attorney, Alex Velinsky, associate of Cooley LLP. "The settlement makes sure the amount is covered."

As previously reported, Sony and Warner have agreed to cap the distributions made to them on account of their claims.

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.

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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