Summit Financial creditors committee files plan, disclosure statement

By Sarah Lizee

Olympia, Wash., March 11 – Summit Financial Corp.’s official committee of unsecured creditors filed a combined Chapter 11 plan and disclosure statement on Monday with the U.S. Bankruptcy Court for the Southern District of Florida.

Under the plan, holders of allowed administrative claims will receive cash equal to the allowed amount of their claims.

Holders of allowed ABL lenders claims will receive cash in the amount of 95% of the net cash derived from ongoing collections from the debtor’s loan portfolio.

Holders of allowed general unsecured claims and allowed subordinated unsecured claims will receive a pro rata share of 5% of the net cash collected on the debtor’s loan portfolio until the net ABL lenders claim and accrued interest is paid in full, and 100% of the net cash collected thereafter.

Holders of allowed equity interests will not receive any distribution.

As previously reported, Summit Financials’ disclosure statement was denied approval on Feb. 26 by the court. Judge Raymond B. Ray’s order did not give a reason for the denial.

In November, the court denied the company’s motion for approval of an extension of its exclusive periods for filing and soliciting votes on a Chapter 11 plan.

On July 27, the official committee of unsecured creditors objected to the proposed length of the exclusivity extension.

The committee had said “working toward a consensual plan and achieving one are two different things,” and the committee should have the option of filing its own plans if one proposed by Summit does not provide for adequate treatment of unsecured creditors.

Plantation, Fla.-based Summit provides financing by purchasing and servicing retail installment sales contracts. The company filed bankruptcy on March 23, 2018 under Chapter 11 case number 18-13389.

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