Former Packable gets OK of settlement with committee, ABL agent

By Sarah Lizee

Olympia, Wash., March 6 – Pack Liquidating, LLC, formerly Packable Holdings, LLC, received approval of a settlement with the official committee of unsecured creditors and JPMorgan Chase Bank, NA, the company’s asset-based lending facility agent, according to an order filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the committee, the debtors and ABL agent negotiated to implement a path forward to minimize estate expenses, pursue the causes of action and reconcile the outstanding dispute regarding the ABL parties’ secured claims with respect to the company’s remaining assets.

The settlement fixes the amount of ABL parties’ claims, establishes a modified go-forward budget designed to preserve estate value during the pursuit of the causes of action, and resolves the ABL agent’s asserted secured claims with respect to the remaining assets through an allocation of the proceeds of the causes of action.

Through the settlement, the first $300,000 recovered on the causes of action will go to the estates to fund ongoing estate expenses while the committee pursues the causes of action.

After that, the proceeds, net of contingency fees, will be allocated on a net 50/50 basis between the estates and the ABL agent, with shifting percentages as proceeds increase.

Specifically, the ABL agent will receive 50% and the debtors’ estates will receive 50% of the next $5 million in net proceeds received, if any; the ABL agent will receive 60% and the debtors’ estates will receive 40% of the next $5 million to $10 million in net proceeds received, if any; the ABL agent will receive 40% and the debtors’ estates will receive 60% of the next $10 million to $15 million in net proceeds received, if any; and the ABL agent will receive 50% and the debtors’ estates will receive 50% of the net proceeds from any further recoveries, if any.

The ABL agent waives the right to recover from the estate recovery on account of its claims, or any potential deficiency claim, and the ABL agent’s claim will be fixed as of the date of the order approving the settlement term sheet.

Packable is a Hauppauge, N.Y.-based e-commerce company that operates as a third-party seller of health, beauty and other consumer products on online marketplaces. The company filed bankruptcy on Aug. 28, 2022 under Chapter 11 case number 22-10797.

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