King Mountain hearing on amended statement continued to May 26

By Sarah Lizee

Olympia, Wash., May 13 – King Mountain Tobacco Co., Inc.’s hearing on approval of its amended disclosure statement was continued to May 26, according to a minute entry filed Wednesday with the U.S. Bankruptcy Court for the Eastern District of Washington.

As previously reported, the company’s first disclosure statement was approved on March 22. However, the company filed the amended plan and disclosure statement on April 30.

According to the amended disclosure statement, for the Alcohol and Tobacco Tax and Trade Bureau’s secured claim, starting with the first escrow release date in 2032 and continuing through each subsequent escrow release date until the claim is paid in full, the holder will receive distributions equal to 85% of all escrow funds that are subject to release on each date. In addition, the reorganized debtors will make monthly payments to the holder in the amount of $110,000. Interest will accrue on the unpaid balance of the claims at the Federal Judgment Rate.

The reorganized debtors will make monthly payments in the amount of $33,232.12 each to First Insurance Funding, until its secured claim is paid in full. Interest will continue to accrue on the claims at the rate specified in the premium financing agreement until the claims are paid in full.

The secured claim of the Internal Revenue Service will be paid in full.

The reorganized debtors will make monthly deposits into the escrow accounts designated for the State of Indiana and the State of South Carolina in the amounts of $35,000 and $20,000, respectively, until the unsecured claims have been paid in full. No interest will accrue on these claims.

The reorganized debtors will make monthly payments to the U.S. Department of Agriculture in the amount of $30,000 each until the claim has been paid in full. Interest will accrue on the claims at 2.5% per annum until paid in full.

The reorganized debtors will make monthly payments to the U.S. Food and Drug Administration in the amount of $30,000 each until the claim has been paid in full. Interest will accrue on the claims at 1% per annum until paid in full.

Administrative convenience claims will be paid in cash in full.

Holders of other unsecured claims will receive, on a monthly basis, their pro rata share of a total monthly payment of $20,000, until all other unsecured claims are paid in full. On a periodic basis and at the discretion of the trust administrator, holders will receive distributions from the creditors trust, which is a distribution trust for the administration of assets available for distribution to holders. Simple interest will accrue on the unpaid balance of each other unsecured claim at the Federal Judgment Rate.

Equity interests will be retained.

King Mountain Tobacco is a White Swan, Wash.-based tobacco manufacturer owned and operated by citizens of the Yakama Nation. The company filed Chapter 11 bankruptcy on Sept. 25, 2020 under case number 20-01808.

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