Telogy files first amended plan of reorganization to include disclosure statement

By Caroline Salls

Pittsburgh, Feb. 13 - Telogy, Inc. filed a first amended plan of reorganization Friday with the U.S. Bankruptcy Court for the Northern District of California that includes the related disclosure statement and still gives unsecured creditors their share of $100,000 and senior secured and subordinated claimants shares in the reorganized company.

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.

The company filed a plan of reorganization on Jan. 23.

A hearing on approval of the disclosure statement is scheduled for March 16.

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 $170.4 million in 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 $3,000 in 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 $1.15 million in general unsecured claims will receive their share of $100,000;

• Holders of $38,000 in critical vendor claims, including Agilent, Tektronix and Rhode & Schwarz, will receive 100% of their claim;

• Holders of $61 million in 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;

• Holders of $59,000 in convenience claims of $5,000 or less, who elect to reduce their claim to $5,000 or less or whose claims are reduced to $5,000 or less will be paid in full in cash.

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

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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