Delta Financial liquidation plan takes effect

By Caroline Salls

Pittsburgh, Jan. 6 - Delta Financial Corp. emerged from bankruptcy when its plan of liquidation took effect on Jan. 5, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The plan was confirmed on Dec. 12.

As previously reported, under the plan, a liquidating trust will be established to allocate the company's assets and wind down its affairs.

The subsidiaries' estates will be substantively consolidated and treated as one entity separate from Delta Financial's estate.

Creditor treatment

Treatment of creditors will include:

• Holders of administrative claims and priority tax claims against all debtors and priority unsecured claims against Delta Financial and the subsidiary debtors will recover 100% in cash;

• Holders of secured claims against Delta Financial and the subsidiary debtors will recover 100% either in cash or through the return of the collateral securing the claim;

• Holders of general unsecured claims against Delta Financial will recover 2.9% through a share of trust beneficial interests and liquidating trust assets;

• Holders of general unsecured claims against the subsidiary debtors will recover 14.4% through a share of trust beneficial interests and liquidating trust assets;

• Holders of convenience class claims against Delta Financial and the subsidiary debtors will recover 10% through a share of the liquidating trust; and

• Holders of subordinated claims against Delta Financial and the subsidiary debtors and interests in Delta Financial, Delta Funding, Renaissance Mortgage and Renaissance REIT will receive no distribution.

Delta Financial, a Woodbury, N.Y., specialty consumer finance company, filed for bankruptcy on Dec. 17, 2007. Its Chapter 11 case number is 07-11880.

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