Graphics Properties disclosure approved by court; plan hearing Oct. 29

By Alice Popovici

New York, Sept. 15 - Graphics Properties Holdings, Inc., formerly Silicon Graphics, Inc., received authorization for its disclosure statement for its plan of reorganization, with minor modifications, during a Tuesday hearing with the U.S. Bankruptcy Court for the Southern District of New York.

A plan confirmation hearing is scheduled for Oct. 29.

Mark Somerstein, a Graphics Properties attorney with law firm Ropes & Gray LLP, told the court that the plan "creates a liquidating trust," under which 75% of the trust goes to the lenders and the remaining 25% goes to the prior claim holders. In addition, there were some modifications related to tax issues and related to the allowance of the lenders' secured and unsecured claims, as well as modifications to the structure of the liquidating trust as related primarily to tax issues.

"The way we've set up the trust is a waterfall, and the bottom of the waterfall is unsecured creditors," Somerstein said. "Certainly, we hope there will be something for them, but frankly, I'm skeptical."

Silicon Graphics, a Sunnyvale, Calif.-based provider of products and services for use in high-performance computing and data management, filed for bankruptcy on April 1. Its Chapter 11 case number is 09-11701.

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