A chapter 11 filing is a voluntary action taken by a company that allows a company to continue normal day to day operations while it attempts to “reorganize” its debts. The company, often with the participation of creditors, creates a reorganization plan under which to repay all or part of its debts.

An official committee of unsecured creditors is formed by the Office of the United States Trustee and typically includes from 5 to 9 of the company’s largest unsecured creditors. This committee hires counsel and gathers and reviews information about the debtor company, including the debtor company activities and financial condition, and participates in the development and negotiation of a chapter 11 plan of reorganization.

A bar date notice is sent out to parties who may have a claim against the company requesting that they submit a “proof of claim” by a specific date.

The company has the exclusive right to formulate a plan of reorganization during the first 120 days of the chapter 11 process which details, among other things, how the company intends to pay its creditors. This plan of reorganization is filed with the Bankruptcy Court along with a disclosure statement. The disclosure statement is a document that contains information concerning the assets, liabilities, and business affairs of the debtor company sufficient to enable a creditor to make an informed decision about the debtor’s plan of reorganization. Once the disclosure statement is approved by the Bankruptcy Court, the company sends out the plan of reorganization along with the disclosure statement to all creditors who are entitled to vote on the plan of reorganization.

After the creditors vote on the plan of reorganization, the company seeks Bankruptcy Court approval of its plan of reorganization. If the plan of reorganization is approved or “confirmed” by the Bankruptcy Court, the company will pay the creditors claims pursuant to the plan of reorganization.

The Bankruptcy administrator seeks to promote the efficiency and protect the integrity of the federal bankruptcy system. The primary role of the bankruptcy administrator is to serve as the “watchdog over the bankruptcy process.” The bankruptcy administrator monitors the conduct of bankruptcy parties, oversees related administrative functions, and acts to ensure compliance with applicable laws and procedures in order to further the public interest in the just, speedy and economical resolution of cases filed under the Bankruptcy Code.

Specific Responsibilities of the Bankruptcy Administrator include:

• Taking legal action to enforce the requirements of the Bankruptcy Code and to prevent fraud and abuse;
• Ensuring that bankruptcy estates are administered promptly and efficiently;
• Appointing and convening creditors’ committees in Chapter 11 business reorganization cases;
• Reviewing applications for the retention of professionals and ensuring that professional fees are reasonable; and
• Advocating matters relating to the Bankruptcy Code and rules of procedure in court.

Pursuant to Section 1102(a)(1) of the United States Bankruptcy Code, the Official Committee of Unsecured Creditors, generally referred to as the Creditors’ Committee, was appointed on July 24, 2017. The Committee appointed generally consists of the holders of the largest claims against the debtor. Its primary functions is to be the negotiating body for the Plan of Reorganization as the representatives of the various types of creditors they represent and provide supervision of the debtor in possession.

The individuals appointed to the Creditors Committee are:

The Unsecured Creditors’ Committee has hired the following professionals to assist it:

Members of an unsecured creditors committee have a fiduciary duty to all unsecured creditors. This means that members of the creditors committee must act with loyalty to all their constituents and avoid any conflict of interest that would impair that loyalty. Members of an unsecured creditors committee also have an obligation to maintain confidentiality of confidential or sensitive information obtained from the debtor company.

The meeting of creditors under Section 341 of the Bankruptcy Code was held on August 16, 2017 at 10:00 a.m., at Creditors Meeting Room, 1st Floor, 101 South Edgeworth Street, Greensboro, NC 27401 At this meeting, representatives of the Debtor will appear and submit to an examination under oath. The purpose of the examination is to learn of the liabilities and financial conditions of the Debtor, the operation of its business, and the prospects for reorganization.

Schedules of creditors have been filed with the Bankruptcy Court. Any creditor holding a scheduled claim which is not listed as disputed, contingent, or unliquidated as to amount may, but is not required to, file a proof of claim in the chapter 11 case. Creditors whose claims are not scheduled or whose claims are listed as disputed, contingent, or unliquidated as to amount and who desire to participate in the case or share in any distribution must file their proofs of claim prior to the bar date established by the Bankruptcy Court. Proof of claim forms are available in the clerk’s office of any bankruptcy court or at the link below.

The General Claims Bar Date For All Claims arising before July 10, 2017: November 14, 2017.

Governmental Bar Date For All Claims arising before July 10, 2017: 180 days from July 10, 2017.

Proofs of claim must be filed so as to be received on or before the above referenced bar dates.

You may file your claim with the Bankruptcy Court at the following address:

United States Bankruptcy Court
Middle District of North Carolina
Office of the Clerk
101 S. Edgeworth Street
Greensboro, NC 27401

Or you may file your claim electronically with the bankruptcy court at the following website: http://www.ncmb.uscourts.gov/electronicproofclaimform and clicking on "Submit a Proof of Claim".

Please file proof(s) of claim, if any, via US Mail, overnight courier or other hand delivery system as indicated above. Facsimile and e-mail submissions are not acceptable. You may however, submit your proof of claim electronically to the Bankruptcy Court at the following website: http://www.ncmb.uscourts.gov/electronicproofclaimform and clicking on "Submit a Proof of Claim". If you file a hard copy of your proof of claim and would like a copy of your proof of claim returned to you as proof of receipt, please enclose an additional copy of the proof(s)of claim and a self-addressed postage-paid envelope.

Please click Here to download a Proof of Claim Form.

Proofs of claim submitted by facsimile or e-mail will not be accepted.

The company has the exclusive right by law to propose a plan of reorganization during the first 120 days of the chapter 11 process which plan of reorganization details, among other things, how the company intends to pay its creditors. The plan of reorganization is filed with the bankruptcy court along with a disclosure statement. The disclosure statement is a document that contains information concerning the assets, liabilities, and business affairs of the debtor company sufficient to enable a creditor to make an informed decision about the debtor’s plan of reorganization. Once the disclosure statement is approved by the bankruptcy court, the company sends the plan of reorganization along with the disclosure statement to all creditors who are entitled to vote on the plan of reorganization.

Generally, unsecured creditors are classified under the plan of reorganization in a class unto themselves, and unless said unsecured creditors are: (i) deemed to accept the plan of reorganization in which case they are paid 100 % of their claim (which accrued prior to the filing of the chapter 11 case on July 10, 2017), or (ii) deemed to reject the plan of reorganization in which case they are paid nothing on their claim, they will be entitled to vote on the plan of reorganization.

Once a plan of reorganization has been filed, further information will be given as to the voting status of unsecured creditors and instructions as to casting a ballot for voting on the plan of reorganization.

After creditors vote on the plan of reorganization, the company will seek bankruptcy court approval of its plan of reorganization. If the plan of reorganization is approved or “confirmed” by the bankruptcy court, the company will pay the creditors claims pursuant to the plan of reorganization.

Once a plan of reorganization has been filed and confirmed by the bankruptcy court, further information will be given with respect to expected timing of any distributions and procedures to follow to receive a distribution.