Velti wins court backing of disclosure statement for liquidation plan

By Kali Hays

New York, April 10 - Velti, Inc. obtained court approval of the disclosure statement related to its proposed plan of liquidation on Thursday, according to an attorney familiar with the case.

As previously reported, the liquidation plan includes a litigation trust that was pre-funded with $550,000, of which $300,000 will be distributed to general unsecured creditors under the plan and $250,000 will be held in reserve for payment of professional fees and expenses of the trust.

Velti said additional amounts received, generated or recovered by the trust will be used to pursue causes of action, to adjudicate general unsecured claims, to pay trust costs and expenses and for distribution to trust beneficiaries.

As previously reported, the sale of substantially all of Velti's assets to GSO Capital Partners LP affiliate GSO MMBU Acquisition LLC was approved by the court in December.

Creditor treatment

Treatment of creditors will include the following:

• Administrative claims, priority tax claims and other priority claims will be paid in full in cash, without interest;

• Holders of other secured claims will either be paid in full in cash or receive the collateral securing the claims;

• After administrative claims, other secured claims and priority claims and other wind-down costs are paid, remaining amounts in the company's estates will be paid to senior secured loan lenders. These amounts will not include any litigation trust funds;

• Holders of general unsecured claims will receive a share of distributable cash from a litigation trust except to the extent they have been paid by Velti or its purchaser before the plan effective date;

• The holder of a GSO deficiency claim will receive litigation trust cash remaining after general unsecured claims have been paid in full;

• Intercompany claims are deemed waived under a global settlement; and

• Holders of equity interests will receive no distribution.

London-based Velti provides mobile software platforms, applications and services for operators and advertising agencies in southeastern Europe, the United Kingdom and the United States. The U.S. operations filed for bankruptcy on Nov. 4 under Chapter 11 case number 13-12878.

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