Former Wet Seal and committee’s joint plan effective as of Dec. 31

By Caroline Salls

Pittsburgh, Dec. 31 – The plan of liquidation filed by Seal123, Inc., formerly Wet Seal, Inc., and its official committee of unsecured creditors took effect on Dec. 31, according to an 8-K filed with the Securities and Exchange Commission.

The plan was confirmed by the U.S. Bankruptcy Court for the District of Delaware on Oct. 30.

As previously reported, Seal123 said its assets are largely limited to cash and causes of action, as well as other assets excluded in the sale of the company’s assets to Versa Capital Management, LLC affiliate Mador Lending, LLC.

The company said the plan calls for the creation of a liquidation trust that will administer and liquidate all remaining property, including sale proceeds.

Treatment of creditors will include the following:

• Letter-of-credit facility claims, administrative claims, priority tax claims, pre-bankruptcy credit agreement claims, secured claims, priority claims and general unsecured claims will be paid or otherwise satisfied in full;

• Holders of multi-debtor consolidated general unsecured claims will hold a single claim in an allowed amount that is 150% of the face amount of the claim against a single debtor;

• Holders of allowed general unsecured claims will receive their share of liquidation trust interests;

• Rodam has agreed in writing to accept the plan and that its claims would be subordinate to all other allowed general unsecured claims. Accordingly, the Rodam claims will not be entitled to any distribution until all other unsecured claims are paid in full in accordance with the plan;

• Holders of subordinated claims will not be entitled to any distribution; and

• All equity interests will be deemed void and canceled, and holders will not retain any property or interest in property under the plan.

Wet Seal, a Foothill Ranch, Calif., clothing retailer, filed for bankruptcy on Jan. 15, 2015 under Chapter 11 case number 15-10081.

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