Former Edgenet wins OK of lender, committee plan support agreement

By Kali Hays

New York, Sept. 29 – EI Wind Down, Inc., formerly Edgenet, Inc., has reached a plan support agreement with pre-bankruptcy lender Liberty Partners Lenders, LLC and its official committee of seller noteholders, according to a Sept. 29 order with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, EI said that the support agreement “will form the basis of the soon to be filed plan and disclosure statement, which will bring a relatively prompt resolution to these Chapter 11 cases.”

Under the proposed agreement, Liberty will receive a $5 million payment from EI’s sale proceeds and the seller noteholders will be provided “certainty in terms of a recovery on account of their collective interests.”

The court approved EI’s $7.98 million sale of substantially all of its assets to EdgeAQ, LLC on June 12.

Former Edgenet employees Steve Proctor, Chris Dowdy and J.J. Freitag formed EdgeAQ for the purpose of purchasing Edgenet’s assets.

In addition, through a negotiated $1.34 million reduction of Liberty’s secured claim, Liberty will fund EI’s liquidation plan and allow for payment of any related fees and costs.

Any remaining funds from the $1.34 million will be paid directly to the secured noteholders.

In return, Liberty and the noteholders will vote in support of the impending liquidation plan and the adversary proceeding between EI and the noteholders will be dismissed.

Required milestones under the support agreement include a plan incorporating the PSA terms be filed by Oct. 6, confirmation of the plan by Dec. 15 and that the plan be effective no later than Dec. 31.

Edgenet, an Atlanta-based provider of cloud-based content, applications and services, filed for bankruptcy on Jan. 14, 2014. The Chapter 11 case number is 14-10066.

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