540 West 21st Street’s plan of liquidation effective as of April 18

By Sarah Lizee

Olympia, Wash., April 19 – 540 West 21st Street Holdings LLC’s Chapter 11 plan of liquidation went into effect on Thursday, according to a notice filed with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the plan, which was confirmed on March 13, contemplated the sale of substantially all of the debtor’s assets and provided that the effective date would occur on or shortly after the closing of the sale. After that, the debtor will be dissolved.

Under the plan, $1.25 million of unsecured claims and $1.25 million of general unsecured trade claims will be paid in full.

Holders of $90.69 million first-lien claims are expected to receive a recovery of 71% via a cash payment when the sale closes.

Holders of $28.18 million of DZ claims are expected to receive a recovery of 45% via a pro rata share of the general unsecured claim recovery pool plus a carveout.

Holders of $8.01 million of Gutkind claims are expected to receive a recovery of 50% via a pro rata share of the general unsecured claim recovery pool plus a carveout.

Holders of $1.49 million of IRHA trade claims are expected to receive a recovery of 46% via a carveout.

Holders of Casco claims, intercompany claims, subordinated claims and equity interests are expected to receive nothing under the plan.

The New York-based real estate holding company filed Chapter 11 bankruptcy on Aug. 2, 2023 under case number 23-11053.

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