At a hearing held before the U.S. Bankruptcy Court for the Southern District of New York on October 6, 2022, Togut, Segal & Segal LLP, as restructuring counsel, and King & Spalding LLP, as special corporate and finance counsel, successfully obtained confirmation of a chapter 11 plan of liquidation on a fully consensual basis for Pareteum Corporation and certain affiliates (“Debtors”), a global cloud communications platform company. Judge Beckerman overseeing the bankruptcy cases congratulated the parties on confirmation and thanked the professionals for their cooperative approach in achieving this result, saying that the case was “very busy” and “crazy” at the beginning and “could have gone off the rails.”
Confirmation of the plan comes less than five months after the bankruptcy cases were filed and follows a June 30, 2022 order issued by the Bankruptcy Court approving the sale of substantially all of the Debtors’ assets on a going concern basis to stalking horse purchasers Circles MVNE Pre Ltd. (“Circles,” which also served as DIP financing lender) and Channel Ventures Group LLC (“CVG,” the former minority holder of the Debtors’ first lien debt and agent and lender under an existing junior subordinated secured debt facility). The closing of the sale occurred, effective as of July 11, 2022, following a Global Settlement among the Debtors, the purchasers, and the official committee of unsecured creditors. As a result of the sale, more than 1,000 contracts were assigned to the purchasers resulting in a significant reduction in claims against the Debtors’ estates and substantially all of the Debtors’ employees were offered positions with the purchasers.
Under the chapter 11 plan, a liquidation trust will be funded with with an aggregate of at least $1.25 million from Circles and CVG in accordance with the terms of the Global Settlement to allow a liquidating trustee to effectively pursue certain retained causes of action on behalf of unsecured creditors (which are the beneficiaries of the liquidating trust) and to complete the administration of the Debtors’ chapter 11 cases.