Benitago has mediator appointed as plan negotiations continue

By Sarah Lizee

Olympia, Wash., Dec. 1 – Benitago Inc. had bankruptcy judge Alan S. Trust appointed as mediator to its case by the U.S. Bankruptcy Court for the Southern District of New York at the company’s request, according to an order filed Friday.

As previously reported, the company said that since October, the debtors have engaged in discussions with their creditors and lender CoVenture to reach a value-maximizing consensual resolution of the Chapter 11 cases.

As a result of those discussions, the debtors received a term sheet from CoVenture for a proposed Chapter 11 plan of reorganization that contemplates a new-money investment by CoVenture and a global, consensual resolution of its claims.

Benitago said it is in discussions regarding the CoVenture term sheet with the advisers for SellersFunding, the senior secured creditor of Benitago’s parent company, and the official committee of unsecured creditors.

On Nov. 27, the company filed a Chapter 11 plan that incorporates the term sheet, which at this time is not supported by SellersFunding or the committee.

The company said the debtors have continued discussions with the parties, but ongoing disputed issues related to the plan remain.

“These issues threaten to delay the significant progress the debtors’ have made in these Chapter 11 cases, as well as the debtors’ proposed timeline to emerge from these Chapter 11 cases, which would negatively impact not only the debtors, but all creditors and parties-in-interest,” Benitago said.

“Further if the parties cannot reach consensus and choose to litigate the plan, the debtors will be forced to shift and file a motion to convert these Chapter 11 cases to cases under Chapter 7 of the bankruptcy code.”

The company is hoping to emerge from Chapter 11 in early 2024.

New York-based Benitago purchases companies that sell their products through Amazon. The company filed bankruptcy on Aug. 30 under Chapter 11 case number 23-11394.

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