L&L Wings’ Chapter 11 plan effective as of March 16

By Sarah Lizee

Olympia, Wash., March 16 – L&L Wings, Inc.’s Chapter 11 plan went into effect on Wednesday, according to a notice filed with the U.S. Bankruptcy Court for the Southern District of New York.

According to the disclosure statement, the plan is being funded from a portion of the debtor’s cash on hand, post-effective date financing from TD Bank, NA or another lender, up to $2 million in cash and an up to $4 million loan from interest holders.

Under the plan, administrative claims, fee claims, statutory fees, priority tax claims and 20-day claims will be paid in full in cash.

General secured claims are unimpaired, and holders will retain their liens on their specifically financed collateral and will continue to receive payments in line with their finance agreements.

TD Bank will not receive a distribution on behalf of its secured claim but will continue to retain its liens against the debtor’s assets to secure the debtor’s obligations under its guarantees executed in favor of TD and any post-effective date loan agreements.

Holders of convenience claims will be paid in full in cash.

The debtor agreed to pay to Beach Mart $10.69 million, which is 50% of Beach Mart’s proof of claim amount of $21.39 million.

Holders of general unsecured claims will receive a 50% distribution on account of their claims in cash.

Holders of unsecured claims arising from pre-petition guarantees of the debtor signed in connection with some of its nonresidential leases will not receive a distribution, but the guarantees will remain in full force and effect.

Holders of insider claims will receive no distribution and will be deemed to have waived their claims against the debtor in full exchange for and in partial consideration of the Levy parties’ releases.

Interests will be retained.

The New York-based beachwear and beach sundry items retailer filed bankruptcy on April 24, 2021 under Chapter 11 case number 21-10795.

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