More on it..............
Creditors cleared to vote on KIT digital Chapter 11 plan
By Katy Stech, Dow Jones Newswires
Tuesday 18 June 2013
New York bankruptcy court judge signs off on media technology firm's plan summary.
A Manhattan bankruptcy judge cleared KIT digital Inc.'s creditors to begin voting on the struggling media-technology company's Chapter 11 restructuring plan.
The creditors have been critical of the company's plan to transfer majority ownership to three investment firms while allowing existing shareholders to buy new shares for 20 cents each.
After a hearing in U.S. Bankruptcy Court in Manhattan, Judge Robert Gerber signed off on KIT digital's plan summary, allowing the company to send the restructuring plan to creditors who have until July 18 to vote on it. The Chapter 11 plan would give three investment firms--led by technology investment firm JEC Capital Partners--the power to spend $25 million to buy an 89% stake in KIT digital, which filed for bankruptcy protection on April 25.
Click here to find out more!The remaining 11% stake in the company would be given to JEC Capital Partners in exchange for a bankruptcy loan it extended to the company. JEC Capital is headed by KIT digital's interim chief executive and activist investor, Peter Heiland. The company's biggest lender, Western Technology Investments, would be paid $9 million and get new company stock valued at about $650,000. It is owed more than $19 million.
The plan would pay unsecured creditors in full and give existing shareholders the chance to buy new shares in the company, but both of those groups have questioned whether those goals are realistic.
Judge Gerber set an Aug. 5 hearing to consider confirming the plan.
A group of hedge funds that own shares in KIT digital complained to Judge Gerber that company officials "constrained access" to an online data room for potential buyers that might have challenged the deal. In its disclosure statement, officials disputed that accusation and said they are continuing "to evaluate alternative proposals as they are presented."
KIT digital officials, through a spokeswoman, declined to comment on Monday.
In earlier court papers, unsecured creditors accused KIT digital executives of being overly optimistic when they said the company could pay them back all of the roughly $14.9 million they are owed.
That debt amount doesn't include a $14.6 million claim asserted by a shareholder called Invigor Group Ltd., which said that it is owed
News 
Market Data 
Discover 
