New Stream Secured Capital announces May 9 was plan effective date

By Jim Witters

Wilmington, Del., May 16 - New Stream Secured Capital, Inc. has declared May 9 as the effective date for its second amended joint plan of reorganization, according to documents filed on May 16 with the U.S. Bankruptcy Court for the District of Delaware.

The company's plan of reorganization was confirmed by the court on April 23.

The confirmation came nearly one year after the company's pre-packaged bankruptcy unraveled amid inter-creditor disputes and threats of litigation that could have taken years to wend their way through the courts, debtor's attorney Scott M. Esterbrook said at the confirmation hearing.

A year of negotiations and compromise led to the resolution of all the conflicts, allowing a plan confirmation after a unanimous vote by creditors, he said.

Treatment of creditors

Treatment of creditors under the plan includes the following:

• Holders of administrative claims and other priority claims will be paid in full in cash;

• Holders of intercompany claims will receive no distribution;

• Holders of Bermuda non-C, F and I claims will receive all of the available cash and class A interests in wind-down entities;

• Holders of U.S.-Cayman claims will receive a beneficial interest in the liquidating trust, their share of the actual distributions from the liquidating trust to which the insider released parties who were released on the effective date would have been entitled and a percentage share of pre-effective date net liquidation proceeds.

The liquidating trust will receive all class B interests in the wind-down entities, and holders of U.S.-Cayman claims will receive periodic distributions from the trust;

• Holders of general unsecured claims against New Stream Insurance, LLC (NSI) and New Stream Capital LLC (NSC) will receive cash remaining in those estates after payment in full of administrative and priority claims;

• Holders of New Stream Secured Capital LP (NSSC) debtors' general unsecured claims will receive a share of up to $100,000 in cash;

• Holders of New Stream Secured Capital, Inc. (NSCI) debtors' general unsecured claims will receive no distribution;

• Interests in NSI, which are held by NSSC, will be extinguished in exchange for the transfer to NSSC of all cash remaining in the NSI estate after the payment into a disputed claim reserve, as well as the transfer to NSSC of all assets held by NSI;

• Holders of interests in NSSC and NSCI will receive no distribution; and

• Holders of NSC interests will retain those interests.

New Stream, a Ridgefield-Conn.-based investment fund, filed for bankruptcy on March 13, 2011. Its Chapter 11 case number is 11-10753.

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