Peer Street files Chapter 11 plan and disclosure statement

By Sarah Lizee

Olympia, Wash., Feb. 1 – Peer Street, Inc. filed a Chapter 11 plan and disclosure statement Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

The company said that after lengthy negotiations with the official committee of unsecured creditors and creditors Pacific Funding Trust 1002 and Pacific RBLF Funding Trust, the debtors are proposing the plan for the resolution of their cases.

Through the plan, the debtors will transition management of the run-off of their mortgage assets to Colchis, an affiliate of the Pacific creditors, liquidate the non-loan assets, wind down their corporate affairs and make distributions to investors and other creditors.

Priority non-tax claims and other secured claims are unimpaired.

Holders of class 3 prepetition loan claims will receive all available cash collateral; conveyance, transfer and assignment of the debtors’ interest in the pre-effective date servicing advances and pre-effective date servicing fees; the proceeds of the prepetition agent’s collateral received after the effective date, subject to funding of the corporate debtor reserve, as applicable; and a pro rata share of the distributable cash of each obligor debtor, which will be pari passu with class 4 at the respective obligor debtor. This is expected to result in a 100% recovery. The company estimates $27.36 million in class 3 claims.

Holders of class 4 general unsecured claims will receive a pro rata share of distributable cash, if any. This is expected to receive a recovery of zero to 5%. The amount of claims in this class is to be determined, but about $$26 million non-customer claims have been filed.

Holders of class 5 intercompany claims and interests will have their claims either reinstated or canceled.

Holders of class 6 securities law claims will receive no distribution.

Holders of class 7 parent interests will receive nothing.

Holders of class 8 Pocket one-month claims and class 9 Pocket three-month claims will receive a cash payment on the effective date equal to their pro rata share of a distributable cash at PS Warehouse II, LLC, and subsequent to the effective date, a pro rata share of any forfeited distributions made on account of class 9 claims, in each case until all allowed claims in this class are paid in full. The estimated amount of claims in class 8 is $40.19 million, and the estimated recovery is 85% to 95%. The estimated amount of claims in class 9 is $1.34 million, and the estimated recovery is 90% to 93%.

Holders of class 10 liquidated mortgage-payment-dependent note claims will receive a cash payment equal to their pro rata share of the difference of the proceeds of the underlying loan minus certain amounts according to a waterfall; and a number of funding pool units, valued at one dollar each, equal to the amount held back and contributed by the plan administrator. The estimated amount of claims in this class of $88.83 million, and the estimated recovery is 85% to 90%.

Holders of $3.99 million class 10-1 convenience liquidated MPDN claims will receive a recovery of 80% to 90%. Holders of $112.14 million class 11 unliquidated MPDN claims and $2.86 million class 11-1 convenience unliquidated MPDN claims are expected to receive a recovery of zero to 90%. The company said the high end of the recovery percentage for these classes assumes that an underlying loan associated with the claim has fully performed and been repaid. The low end assumes there is no recovery on the underlying loan.

Holders of $31.26 million of FBO account claims are expected to receive a recovery of 95% to 100%.

Holders of $2.09 million of payment-dependent promissory note claims will receive a recovery of 85% to 95%.

Holders of OppFund LP interests are expected to receive a recovery of 75% to 90%.

The company is proposing an April 10 plan confirmation hearing.

The El Segundo, Calif.-based company filed bankruptcy on June 26, 2023 under Chapter 11 case number 23-10815.

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