Klausner Lumber Two, committee get confirmation of Chapter 11 plan

By Sarah Lizee

Olympia, Wash., March 11 – Klausner Lumber Two, LLC and its official committee of unsecured creditors received confirmation of their Chapter 11 plan, according to an order filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the company’s Chapter 11 plan drew an objection from the debtor’s single largest creditor, Carolina Sawmills. On Wednesday, the companies entered into a settlement agreement, under which Carolina Sawmills had its disputed $75 million claim temporarily allowed for voting purposes. In turn, Carolina Sawmills agreed to vote in favor of the plan as the only creditor in class 4.

The plan seeks to effectuate an orderly liquidation and distribution of assets and to resolve claims. A liquidating trustee will, among other things, effectuate the distribution of the proceeds of the sale of the debtor’s assets and close the case.

According to the disclosure statement filed with the plan, holders of CS secured claims will receive cash equal to the amount of their claims, the property that serves as security for those claims, or other treatment leaving their claims unimpaired.

Holders of administrative expense claims, professional fee claim, priority tax claims and priority claims are unimpaired.

Holders of WARN Act class settlement claims will receive their pro rata share of the net WARN Act class settlement amount, less any and all state, federal and/or other payroll tax withholdings.

Holders of CS deficiency/unsecured claims, general unsecured claims and Klausner Group unsecured claims will receive their pro rata share of an amount equal to the net distribution proceeds.

Holders of subordinated claims will receive the pro rata share of an amount equal to the net distribution proceeds remaining after satisfaction in full of all claims senior to these.

Interests will be canceled with no distribution to holders.

Klausner Lumber Two is an Enfield, N.C., sawmill and lumber company. The company filed bankruptcy on June 10, 2020 under Chapter 11 case number 20-11518.

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