Former Point Blank Solutions’ Chapter 11 bankruptcy case closed

By Sarah Lizee

Olympia, Wash., Jan. 26 – SS Body Armor I, Inc.’s Chapter 11 bankruptcy case was closed on Jan. 19 by the U.S. Bankruptcy Court for the District of Delaware, according to an order.

As previously reported, the recovery trustee for the case had asked the court to enter a final decree closing the case.

“The relief sought herein will facilitate and preserve an outcome for the estate’s constituencies that was unimaginable when the debtor entered Chapter 11 more than 10 years ago,” the trustee said.

The trustee said the company was embroiled in an investigation by the Securities & Exchange Commission, and its chief executive officer had been indicted for fraud and related crimes that resulted in a 17-year felony sentence and substantial legal bills for the debtor.

“Trade vendors and other creditors were left unpaid as the debtors entered Chapter 11 initially electing a sale process that was unlikely to yield a distribution to creditors,” the trustee said.

At the time the recovery trust was formed, the CEO’s appeals were pending, and the recovery trust’s ability to make meaningful distributions to holders of allowed equity interests remained uncertain.

“The recovery trust is now prepared to close the bankruptcy case, with holders of allowed general unsecured claims having been paid in full with interest, and holders of allowed equity interests – who already received interim distributions of 15 cents per share – poised to receive additional distributions as high as approximately 21 cents per share, for a total final distribution to equity holders as high as approximately 36 cents per share,” the trustee said.

In addition to seeking closure of the case, the trustee is also seeking court approval of a settlement resolving litigation among the company, the recovery trust, and class plaintiffs in a consolidated pre-petition securities action filed in the U.S. District Court for the Eastern District of New York representing a class of persons or entities who purchased some of the publicly traded shares of SS Body Armor I. Under the settlement, the class plaintiffs will provide about $1.26 million in value to the recovery trust.

The trustee is also seeking approval of a settlement among the company, the recovery trust and Carter Ledyard Milburn, in which Carter Ledyard Milburn will be paid $3.75 million on account of its general unsecured claim for attorneys’ fees.

SS Body Armor was formerly Point Blank Solutions, Inc., a Pompano Beach, Fla., producer of body armor systems for law enforcement and the military. The company filed for bankruptcy on April 14, 2010. Its Chapter 11 case number is 10-11255.

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