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SFX committee seeks delay of disclosure hearing, cites plan changes
By Caroline Salls
Pittsburgh, Aug. 25 – SFX Entertainment, Inc.’s official committee of unsecured creditors asked the U.S. Bankruptcy Court for the District of Delaware to continue the hearing on approval of the disclosure statement for the company’s proposed Chapter 11 plan, according to a motion filed Thursday.
The committee said the amended plan filed by SFX one week before the hearing on the disclosure statement “is in fact a wholly new plan that is dramatically different from the original plan that was filed on July 26, 2016 as a placeholder to obtain an Aug. 30, 2016 hearing date.”
The committee said the new plan changes the proposed classification and proposed treatment of creditors and includes a new structure to address litigation recoveries.
Specifically, the committee said the new plan deletes two classes, creates a new class, combines two classes, creates new litigation contingent value rights (CVRs) and a litigation committee and changes the terms of the previously offered CVRs.
“Despite these new changes, the debtors did not file a new disclosure statement with their new plan, so the committee has no idea what the disclosures regarding these new proposed terms and recoveries will be, let alone sufficient time to evaluate them,” the motion said.
“Given the terms of the new plan, the significant disclosure deficiencies bear directly on the average creditor’s ability to understand what they are proposed to receive.”
The committee said the disclosure statement hearing should be continued to a date that gives creditors 28 days’ notice of the hearing.
SFX, a New York-based producer of live events and entertainment content, filed for bankruptcy on Feb. 1, 2016. The Chapter 11 case number is 16-10238.
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