GBG USA’s Chapter 11 plan of liquidation effective as of Feb. 24

By Sarah Lizee

Olympia, Wash., Feb. 25 – Global Brands Group Holding Ltd. subsidiary GBG USA Inc.’s Chapter 11 plan of liquidation went into effect on Thursday, according to a notice filed Friday with the U.S. Bankruptcy Court for the Southern District of New York.

The plan was confirmed on Feb. 3, as previously reported.

According to the disclosure statement, distributions under the plan will be funded from cash on hand, any sales, a portion of the intercompany note proceeds from the Seven Global sale in an amount not to exceed $4.9 million, wind down cash proceeds and proceeds of litigation trust interests.

Under the plan, holders of allowed first-lien claims will receive their pro rata share of all cash in the debtors’ estates as of the effective date after the repayment of the allowed debtor-in-possession claims, other secured claims, fee claims, administrative expense claims, priority non-tax claims and priority tax claims, and the funding of the $2.25 million litigation trust funding amount and the wind down budget. Holders will also receive all intercompany note proceeds received after the effective date, a first-lien litigation trust distribution; and all wind-down cash proceeds.

Holders of allowed second-lien claims will receive their pro rata share of a second-lien litigation trust distribution.

Holders of allowed general unsecured claims will receive their pro rata share of a general unsecured claim litigation trust distribution.

The plan provides for payment in full of all allowed administrative expense claims, fee claims, U.S. trustee fees, other secured claims, priority tax claims and priority non-tax claims.

There will be no recovery to the holders of existing securities law claims, existing interests, intercompany claims or intercompany interests on account of their respective claims and interests.

New York-based GBG USA is primarily engaged in operating the wholesale and direct-to-consumer footwear and apparel business in North America. The company filed bankruptcy on July 29, 2021 under Chapter 11 case number 21-11369.

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