Former Rockport, unsecured creditors committee reach settlement

By Sarah Lizee

Olympia, Wash., Oct. 5 – RP Co. Liquidating, LLC, formerly Rockport Co., LLC, and its official committee of unsecured creditors are seeking approval of a settlement, according to a joint motion filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

The parties said that absent approval of the settlement agreement, the debtors believe that a distribution to unsecured creditors in the Chapter 11 cases would be unlikely given the results of the sale process and the debtors’ capital structure, including the $56 million or more in purported secured subordinated obligations.

The debtors hold claims under Chapter 5 of the bankruptcy code against some of the debtors’ general unsecured creditors.

The committee contends there are colorable claims against Charlesbank Equity Fund IX, LP in its capacity as note agent and against CB Trestles Opco, LLC, CB Trestles Midco, LLC, Trestles IP Holdings, LLC and Reef Lifestyle, LLC on account of shared services agreements.

In turn, the Charlesbank agent contends that it holds secured claims against the debtors of over $56 million, and Reef asserts that it holds unsecured claims against the debtors of over $6.7 million.

The debtor and committee said the settlement agreement resolves the committee challenges in an orderly and cost-efficient manner and allows for a distribution to be made to consenting creditors.

Approval of the settlement agreement will allow for, among other things, the creation of an unsecured creditor reserve in the maximum amount of $500,000 to provide for a distribution to those general unsecured creditors that duly execute the mutual release agreement, and the resolution of potential costly litigation between the parties.

A hearing on the settlement is scheduled for Oct. 25.

Rockport, a West Newton, Mass.-based footwear company, filed its first bankruptcy case on May 14, 2018, and emerged from those proceedings on Dec. 31, 2018. The company filed bankruptcy a second time on June 14 under Chapter 11 case number 23-10774.

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