Former iMedia’s Chapter 11 plan draws objection from Synacor

By Sarah Lizee

Olympia, Wash., Dec. 15 – Legacy IMBDS, Inc.’s (formerly iMedia Brands, Inc.) Chapter 11 plan of liquidation drew an objection from creditor Synacor, Inc., according to documents filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

Synacor argues the plan unfairly prejudices it by unjustifiably determining the extent of Synacor’s secured claim and designating Synacor as a class 4 unsecured creditor.

“The plan’s treatment of Synacor stands in stark contrast to the stipulations debtors made to gain Synacor’s consent to the use of cash collateral and is at odds with the debtors’ obligations under the final DIP order,” the creditor said in the objection.

Synacor said its proofs of claim, which have not been disputed or objected to by the debtors, evidence its secured lien on substantially all of the assets of debtor Portal Acquisition Co. (PAC).

Synacor initiated an adversary proceeding on Nov. 1 to address the priority and extent of its security interest in the PAC-owned assets, the priority and extent of its security interest in the sale proceeds and the priority and extent of its liens on the adequate protection proceeds.

“Debtors cannot nullify Synacor’s fundamental due process and procedural protections under the federal rules of bankruptcy procedure by using the plan to adjudicate Synacor’s claims in the adversary proceeding, including the determination of the extent and priority of Synacor’s claims and interests in this property,” the creditor said.

The plan would also provide releases and exculpations for parties with potential liability associated with Synacor’s claims in the adversary proceeding, Synacor added.

A combined hearing on final approval of the disclosure statement and confirmation of the plan is scheduled for Dec. 21. The U.S. trustee overseeing the case has also filed an objection to the plan.

iMedia Brands is an interactive media company based in Eden Prairie, Minn. The company filed bankruptcy on June 28 under Chapter 11 case number 23-10852.

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