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Former FTD unsecured creditors committee opposes disclosure statement
By Caroline Salls
Pittsburgh, Oct. 17 – The official committee of unsecured creditors for GUE Liquidation Cos., Inc., formerly FTD, Inc., objected to the disclosure for the company’s proposed plan of liquidation, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.
The committee said it negotiated an agreement under which GUE’s lenders will fund a post-confirmation trust to provide a recovery for unsecured creditors based on the company’s claims that its $15.5 million wind-down budget would be sufficient to satisfy all administrative expenses and wind down the estates.
However, the committee said the proposed plan now creates the prospect that GUE “will need to invade the committee’s settlement with the lenders to satisfy a currently unquantifiable amount of administrative and priority claims.”
The committee said its settlement with the lenders is based on the settlement funds solely being available for the trust to reconcile unsecured claims and make distributions to unsecured creditors.
“The plan, therefore, threatens to blow up the committee’s settlement with the lenders, creating the prospect that the plan is unconfirmable,” the objection said.
“The disclosure statement, however, is silent as to these issues.”
Without certainty regarding the sources of recovery and disclosure about the funding gap that may exist, the committee said creditors are unable to cast informed votes on the plan.
The disclosure statement hearing is scheduled for Oct. 23.
FTD is a floral wire service based in Downers Grove, Ill. The company filed bankruptcy on June 3 under Chapter 11 case number 19-11240.
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