Telogy files plan of reorganization; unsecured creditors to share $100,000

By Caroline Salls

Pittsburgh, Jan. 23 - Telogy, Inc. filed a plan of reorganization Monday with the U.S. Bankruptcy Court for the Northern District of California that gives unsecured creditors their share of $100,000 and senior secured and subordinated claimants shares in the reorganized company.

Under the plan, reorganized Telogy will issue 899,559 new shares, including 796,909 series A new shares, 3,844 series B new shares; 49,403 series C new shares and 49,403 series D new shares.

The company will also issue warrants to holders of subordinated claims to purchase an additional 88,498 series A shares if they vote to accept the plan.

Treatment of creditors will include:

• Holders of pre-bankruptcy senior secured claims will receive their share of special trust account cash, their share of 793,083 new series A shares and cash for all fees and expenses for the company's reorganization;

• Holders of Charter One loan agreement secured claims will receive reinstatement of the legal, equitable and contractual right to their claims, for which they will be paid in full;

• Holders of other secured claims will receive the property securing their claim;

• Holders of general unsecured claims will receive their share of $100,000;

• Holders of critical vendor claims, including Agilent, Tektronix and Rhode & Schwarz, will receive 100% of their claim;

• Holders of subordinated claims will receive their share of 3,826 new series A shares and two series of subordinated claim warrants to acquire 88,498 series A shares if they vote to accept the plan.

If they vote to reject the plan, subordinated claimholders will be treated as general unsecured claimants;

• Holders of intercompany claims, junior subordinated claims and interests claims will receive no distribution.

Telogy said it expects to obtain an up to $20 million five-year revolving exit facility.

On Dec. 12, Telogy asked the court for permission to file its plan of reorganization before filing the related disclosure statement to aid the final debtor-in-possession approval process and indicate its progress in its Chapter 11 case.

Telogy said then that it does intend to file a disclosure statement at least 32 days before a scheduled disclosure statement hearing, as required by bankruptcy law.

Telogy, a Union City, Calif.-based electronics testing company, filed for bankruptcy on Nov. 29. Its Chapter 11 case number is 05-49371.

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