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NEWS-GAZETTE: Unsecureds to Recover 60% to 81% in Liquidating Plan

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The News-Gazette, Inc., an Illinois corporation, and D.W.S., Inc., a Delaware corporation, filed with the U.S. Bankruptcy Court for the District of Delaware a Plan of Liquidation and a Disclosure Statement on June 25, 2020.

The Plan provides for the Debtors, and the Reorganized Debtors after the Effective Date, to liquidate the remaining Assets of the Debtors and their Estates (referred to as the “Reorganized Debtor Assets”), including investigation and, if appropriate after investigation, prosecution of Retained Causes of Action. The Plan provides for the distribution of the remaining Assets to classes of creditors in the order of priority. After payment in full to Holders of Administrative, Priority and Secured Claims, the Plan establishes a reserve fund of $300,000 to be distribution ratably to Holders of General Unsecured Creditors with the remaining Reorganized Debtor Assets, to be Distributed ratable to Holders of Pension Claims.

The Reorganized Debtors will be responsible for liquidating the Reorganized Debtor Assets and making Distributions to Holders of Allowed Claims, the dissolution of the Debtors, and closing of the Chapter 11 Cases.

Class 2 General Unsecured Claims will have a 60% to 81% estimated percentage recovery. On or as soon as practicable after the Initial Distribution Date and/or any Subsequent Distribution Date, the Reorganized Debtors shall pay each Holder of an Allowed General Unsecured Claim, in full and final satisfaction of such Allowed General Unsecured Claim, its Pro Rata share of the Reorganized Debtor General Unsecured Claims Reserve. For the avoidance of doubt, the Reorganized Debtor General Unsecured Claims Reserve shall be the only source of funding under the Plan that is available for Distributions to Holders of Allowed General Unsecured Claims.

Class 5 Equity Interests will be deemed cancelled, null, and void.

All of the Debtors’ and the Estates’ rights, title, and interests in the Reorganized Debtor Assets shall be automatically deemed vested in the Reorganized Debtors, notwithstanding any prohibition on assignment under non-bankruptcy law. The Reorganized Debtors shall hold the Reorganized Debtor Assets for the benefit of the Holders of Allowed Claims to be liquidated and distributed in accordance with the provisions of the Plan.

On the Effective Date, the Debtors shall fund, and the Reorganized Debtors shall establish and thereafter maintain, the Reorganized Debtor Administrative and Priority Claims Reserve, which funds shall vest in the Reorganized Debtors free and clear of all Liens, Claims, encumbrances, charges, and other interests, except as otherwise specifically provided in the Plan and Confirmation Order. Funds in the Reorganized Debtor Administrative and Priority Claims Reserve shall be used by the Reorganized Debtors only for the payment of U.S. Trustee Fees and Allowed Secured Claims, Administrative Claims, Priority Claims, and Professional Compensation Claims, to the extent that such Allowed Claims have not been paid in full on or prior to the Effective Date.

The Debtors shall continue to operate as Debtors in Possession during the period from the Confirmation Date through and until the Effective Date.

A full-text copy of the Disclosure Statement dated June 25, 2020, is available at https://tinyurl.com/y7um5bc9 from PacerMonitor at no charge.

Co-Counsel to the Debtors:

McDONALD HOPKINS LLC
Nicholas M. Miller
Michael J. Kaczka
300 N. LaSalle Street, Suite 1400
Chicago, IL 60654
Telephone: (312) 280-0111

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CHIPMAN BROWN CICERO & COLE, LLP
William E. Chipman, Jr.
Mark D. Olivere (No. 4291)
Hercules Plaza
1313 North Market Street, Suite 5400
Wilmington, DE 19801
Telephone: (302) 295-0191

About The News-Gazette

The News-Gazette is a daily newspaper serving 11 counties in the eastern portion of Central Illinois and specifically the Champaign-Urbana metropolitan area.

The News-Gazette Inc. and its debtor affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 19-11901) on Aug. 30, 2019. At the time of the filing, the Debtor had estimated assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. Judge Karen B. Owens oversees the case. William E. Chipman, Jr. at Chipman Brown Cicero & Cole, LLP, is the Debtors’ legal counsel.

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