Starry Group exits Chapter 11 bankruptcy as private company

By Sarah Lizee

Olympia, Wash., Sept. 1 – Starry Group Holdings, Inc.’s amended Chapter 11 plan went into effect on Thursday, according to a notice filed with the U.S. Bankruptcy Court for the District of Delaware.

The plan was confirmed on May 26.

Starry is going forward as a privately held company, and its shares of common stock will halt trading on the over-the-counter market immediately.

Its board of directors will now include new chief executive officer Alex Moulle-Berteaux and co-founder and former CEO Chet Kanojia, according to a statement from the company.

As background, the debtors filed the Chapter 11 cases with a restructuring support agreement with lenders holding 100% of the debtors’ prepetition term loan claims.

During the Chapter 11 cases, the debtors proceeded down a dual-track path, simultaneously pursuing both a standalone restructuring and a sale transaction to maximize the value of the estates.

After the post-petition marketing process that followed months of prepetition marketing, the value-maximizing transaction proved to be the restructuring, through which the prepetition lenders equitized their prepetition term loan claims and become the owners of the reorganized debtors.

The debtors and lenders also negotiated with the official committee of unsecured creditors, resulting in a settlement.

Through the settlement, the debtors agreed to amend the plan to provide that holders of general unsecured claims that voted in favor of the amended plan and agreed to the third-party releases or didn’t vote on the amended plan and didn’t opt-out of the releases will receive their pro rata share of the greater of (i) $1.63 million and (ii) $11 million minus the amount of all payments to certain specified categories of prepetition creditors made after the petition date.

Originally, the plan provided that holders of general unsecured claims that voted in favor of the plan and agreed to broad releases of some third parties, or who didn’t vote on the plan and didn’t opt out of the releases, would reach their pro rata share of the greater of $250,000 and the difference between budgeted and actual debtor and committee professional fees.

Other priority claims and other secured claims are unimpaired by the plan.

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

Starry is a Boston-based internet service provider. The company filed bankruptcy on Feb. 20, 2023 under Chapter 11 case number 23-10219.

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