Former Gymboree disclosure statement for amended plan OK’d by court

By Caroline Salls

Pittsburgh, March 12 – Gemstone Solutions Group, Inc., formerly Gymboree Group, Inc., obtained court approval of the disclosure statement for its amended plan of reorganization, according to a docket entry made Thursday in the U.S. Bankruptcy Court for the Eastern District of Virginia.

According to the disclosure statement, the plan provides for the reorganization of the Gemstone debtors, with new equity interests being issued to the holder of class B new-money debtor-in-possession financing claims.

The reorganized company will be capitalized, in part, by the provision of an exit facility by the plan sponsor of an affiliate.

To the extent necessary, Gemstone said the exit facility will fund the payment of some administrative and priority claims, fund the reorganized debtors’ general corporate expenses and fund their purchase of a controlling interest in Certified Art and Collectibles, which is developing a system utilizing tags embedded with Near Field Communication antennas to provide electronic verification of the authenticity of art, memorabilia and other items.

Following the acquisition, reorganized Gemstone intends to rename Certified Art and Collectibles as LuxVerity, complete its development and market and operate its products.

Following the plan effective date, the reorganized company’s business will include the new venture, administering the plan and continuing to monetize the debtors’ remaining assets to complete plan distributions and benefit reorganized Gemstone.

Under the plan, holders of administrative claims who opt in to a settlement will have the option to receive either 60% of 32.5% of the claim amount in cash within 10 business days of the effective date and an additional administrative recovery within 10 business days of the monetization date. Those who do not opt in to the settlement will be paid in full in cash.

Priority tax claims will be paid in full in cash.

Holders of pre-bankruptcy ABL claims will be entitled to seek indemnification or reimbursement only from an ABL indemnity reserve.

Holders of other secured claims will be paid in full in cash or receive the collateral securing the claims.

Holders of general unsecured claims and interests in Gemstone Solutions will receive no distribution.

Interests in the subsidiary debtors will be reinstated solely to preserve the company’s corporate structure or will be cancelled.

Gymboree is a children’s apparel specialty retailer based in San Francisco. The company filed bankruptcy on Jan. 16, 2019 under Chapter 11 case number 19-30258.

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