KiOR amends trust cash, first-lien and second-lien creditor treatment

By Caroline Salls

Pittsburgh, June 1 – KiOR, Inc. filed an amended plan of reorganization and related disclosure statement Monday that increases the amount of cash earmarked for the liquidating trust to be established under the plan and amends the proposed treatment of first-lien and second-lien claims, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

The cash component of the liquidating trust will be increased to $400,000 from $100,000. As previously reported, the trust will also be funded by cash designated for continuing trade creditors and the transfer of claims and causes of action belonging to the estate.

Also under the amended plan, holders of first-lien claims and second-lien claims will have been deemed to waive the right to receive any distributions from the KiOR estates on account of their claims.

Under the previous version of the plan, first-lien creditors were to receive equity, and second-lien creditors were slated to participate in liquidating trust distributions.

Creditor treatment

Treatment of creditors under the amended plan will include the following:

• Holders of DIP financing claims will receive the equity in the reorganized company;

• Holders of secured tax claims will receive quarterly payments, beginning 30 days after a plan effective date, for a period of five years from the effective date;

• Holders of priority employee claims will receive deferred cash payments;

• Holders of trade claims will receive a cash payment equal to 50% of the allowed claim, as well as the treatment afforded for general unsecured creditors and a waiver of Chapter 5 causes of action against them. These creditors must vote to approve the plan to receive the continuing trade creditor treatment;

• Holders of convenience claims will receive a cash payment equal to 50% of their claims, with a total cap for the class of $75,000, or claimants can opt to be treated as general unsecured creditors;

• Holders of first-lien claims and second-lien claims will be deemed to have waived their right to any distributions;

• Holders of third-lien claims will receive a share of liquidating trust distributions as if they were holders of general unsecured claims, but any amounts they receive will go to holders of second-lien claims under a subordination agreement;

• Holders of general unsecured claims will receive a share of liquidating trust distribution; and

• Holders of equity interests and subordinated claims will receive no distribution.

The plan confirmation hearing is scheduled for Wednesday.

KiOR is a Pasadena, Texas-based development-stage, next-generation renewable fuels company that filed for bankruptcy on Nov. 10, 2014. The Chapter 11 case number is 14-12514.

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