Virgin Orbit reaches settlement with unsecured creditors committee

By Sarah Lizee

Olympia, Wash., June 20 – Virgin Orbit Holdings, Inc. is seeking approval of a settlement with official committee of unsecured creditors, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

Through the settlement, if the class of general unsecured creditors votes to accept the plan, holders will receive a pro rata share of the following:

• $1.1 million in cash, up from $400,000 originally;

• The difference between $2.25 million, up from $1.5 million originally, and the allowed professional fee claims of the committee professionals;

• The following portions of the total amount of net proceeds of any remaining asset sale: 100% of amounts from zero to and including $825,000, 50% of amounts greater than $825,000 to and including $5 million, 25% of amounts greater than $5 million to and including $7.5 million and 0% of amounts greater than $7.5 million;

• The following portions of the remaining portions of the remaining net tax refunds: 50% of amounts from zero to and including $2.5 million, 75% of amounts greater than $2.5 million to and including $5 million, 80% of amounts greater than $5 million; and

• The establishment of a litigation trust to be funded from distribution proceeds to pursue causes of action of the estates against persons or entities that provided audit services to the debtors and persons or entities based on Chapter 5 of the bankruptcy code who received transfers from the debtors in an amount greater than $100,000 during the 90-day period prior to the petition date.

The terms of the settlement have been incorporated into an amended Chapter 11 plan. The confirmation hearing is scheduled for July 18.

Long Beach, Calif.-based Virgin Orbit operates space launch systems. The company filed bankruptcy on April 4 under Chapter 11 case number 23-10405.

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