Ingenu’s disclosure statement draws objection from U.S. trustee

By Sarah Lizee

Olympia, Wash., Oct. 6 – Ingenu Inc.’s disclosure statement for its Chapter 11 plan of reorganization drew an objection from the U.S. trustee overseeing the case, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of California.

Acting U.S. trustee Tiffany L. Carroll said in her objection that the disclosure statement fails to contain adequate information.

“There is no liquidation analysis showing what would happen in Chapter 7,” Carroll said. “An accurate liquidation analysis must be provided to determine whether the claimants would receive as much as they would in Chapter 7.”

In addition, Carroll said that the disclosure statement does not contain schedules to indicate claimants and corresponding amounts for each claimant for classes 9, 10 and 11.

The U.S. trustee added that the plan appears to force general unsecured claimants to give up their claims in order to receive any payment.

“If the plan is forcing the claimants to give up their claims, then the [disclosure statement] needs to explain this mechanism and the consequence of giving up the claim,” Carroll said.

Carroll also said that the plan restricts general unsecured claimants from transferring or selling their claims.

The U.S. trustee also said that whether general unsecured claimants receive any money is unclear.

“The [disclosure statement] does not describe the current value of the net operating loss (NOL) which is the sole asset to fund payments to class 11 claimants,” she said in the objection.

“The [disclosure statement] and plan do not provide any mechanism to provide notice to class 11 claimants if the creditor account is funded by NOL at all. And, based on the plan’s proposal, it appears that this plan proposes to pay $0 to class 11 claimants if there is no NOL to be distributed from 2020 to 2025.”

San Diego-based Ingenu develops a wireless machine network that enables long-range connectivity for Internet of Things. The company filed bankruptcy on July 27 under Chapter 11 case number 20-03779.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.