WorldVentures files Chapter 11 plan, receives exclusivity extension

By Sarah Lizee

Olympia, Wash., July 20 – Spherature Investments LLC, which does business as WorldVentures, filed a Chapter 11 plan and related disclosure statement on Monday with the U.S. Bankruptcy Court for the Eastern District of Texas.

The plan will effectuate the sale of the company’s assets as a going concern to a purchaser. As previously reported, the company has filed a restructuring term sheet with proposed plan sponsor Verona International Holdings, Inc. However, any party who submits a higher or better offer accepted by the debtors and approved by the court will be the purchaser.

The purchase price will be the sum of the cure costs and up to $82.5 million, which includes $5 million in cash, $5.5 million in assumed secured debt, $16 million in earn-out/royalty payments, up to $45 million in aggregate unpaid pre-petition sales commissions and up to $11 million in assumed deferred revenue.

A liquidating trust will be established and a liquidating trustee will be appointed on the effective date.

All holders of administrative claims will be paid by the liquidating trustee from the sale transaction proceeds and the proceeds from excluded assets.

All holders of general unsecured claims will receive a beneficial interest in the liquidating trust equal to the pro rata share of each holder’s allowed general unsecured claim. The liquidating trustee will make distributions to all general unsecured claims.

All claims of sales representatives are segregated into two categories based on whether they decide to work for or with the purchaser and whether they decide to not work for or with the purchaser. Sales representatives who decide to work for the purchaser will receive compensation for future work and 65% of the amount owed by the debtors from past work, and their pro rata share of certain liquidating trust assets. Sales representatives who decide to not work for or with the purchaser will receive a general unsecured claim.

Equity owners will receive no distributions unless all senior claims are paid in full.

Exclusivity extension

On Tuesday, the court granted the company’s motion seeking an extension of its exclusive plan periods, according to an order.

Specifically, the court extended the plan filing period through Sept. 17 from July 19 and the solicitation period through Nov. 16 from Sept. 17.

Plano, Tex.-based WorldVentures sells travel and lifestyle community memberships. The company filed bankruptcy on Dec. 21, 2020 under Chapter 11 case number 20-42492.

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