Zais Investment Grade VII third amended reorganization plan confirmed

By Caroline Salls

Pittsburgh, Dec. 21 - Zais Investment Grade Ltd. VII's plan of reorganization was confirmed on Dec. 21 by the U.S. Bankruptcy Court for the District of New Jersey.

The plan was filed by GRF Master Fund, LP, Anchorage Illiquid Opportunities Offshore Master, LP and Anchorage Capital Master Offshore, Ltd., together with Hildene Capital Management and Hildene Opportunities Master Fund, Ltd.

As previously reported, the Hildene entities were the proponents of a competing plan filed for Zais' case in October.

However, Hildene's objection to Anchorage's pre-packaged plan filed for Zais was settled via court-supervised mediation, and Hildene became a proponent of the plan.

Treatment of creditors

Treatment of creditors under the confirmed plan will include the following:

• Holders of administrative claims, tax claims, senior indenture administrative claims and indenture priority claims will be paid in full in cash;

• Holders of senior notes claims will receive their share of available cash for a recovery not to exceed 100% of the claim plus interest paid from the effective date at the contract rate, as well as their share of an amount equal to the junior A-2 notes claim;

• Holders of A-2 junior notes claims will receive their share of a one-time $4.38 million cash payment, minus the amount of a Hildene 503(b) claim;

• Holders of A-3 junior notes claims will receive their share of available cash after all senior notes claims and all A-2 junior notes claims are paid in full;

• Holders of B-1 junior notes claims will receive their share of available cash after all senior notes claims and all A-2 and A-3 junior notes claims are paid in full;

• Holders of B-2 junior notes claims will receive their share of available cash after all senior notes claims and all A-2, A-3 and B-1 junior note claims are paid in full; and

• Holders of subordinated claims, income note claims, general unsecured claims and old equity interests will receive no distribution.

Zais is a Cayman Islands-based investment company. An involuntary Chapter 11 case was filed against the company on April 1, 2011. The case number is 11-20243.

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