KVVV heads to liquidation trust

KVVV, the long-silent Pappas Broadcasting station that was formerly a repeater for channel 57 when it was KAZH, has been transferred to a trust that will liquidate Pappas’ remaining holdings, mostly low-power stations.

Their filing states:

Harry J. Pappas and his wife Stella are the subject of Chapter 11 Bankruptcy cases in the United States Bankruptcy Court for the District of Delaware, which are being jointly administered under the caption In re Pappas, No. 08-10949 (PJW). On November 10, 2011, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Pappases’ First Amended Plan of Reorganization Pursuant to Chapter 11 of the United States Bankruptcy Code (the “Plan”). Under the Plan, a liquidating trust (the “Liquidating Trust”) will be formed on or about December 31, 2011, for the benefit of the Pappases’ creditors, pursuant to a form of liquidating trust agreement (the “Trust Agreement”) that was approved by the Confirmation Order. All non-exempt property of the Pappases (the “Trust Property”) will vest in either the Liquidating Trust or, at the election of the Pappases, in an entity to be wholly owned and controlled by the Liquidating Trust (bolding in original). Upon effectuation of the Liquidating Trust, the Chapter 11 Bankruptcy case against Harry J. Pappas and his wife Stella will terminate.
Under the Plan, Harry J. Pappas will be the initial trustee of the Liquidating Trust and will manage the Trust Property for the benefit of the Pappases’ creditors in accordance with the Plan and the Trust Agreement. The Plan provides that if Comerica Bank is provided certain funds plus certain additional consideration (as set forth in the Plan) (collectively, the Discounted Payoff”) on or before March 26, 2012 (subject to extension under certain circumstances, the “Discounted Payoff Date”), then all Trust Property will re-vest in the Pappases (subject to FCC approval). If the Discounted Payoff is not received by Comerica Bank on or before the Discounted Payoff Date, then a successor trustee will succeed Harry J. Pappas as trustee of the Liquidating Trust.

The Trust Property includes, but is not limited to, Harry J. Pappas’s equity interests (LLC membership interests, general partnership and limited partnership interests) in various companies that are FCC licensees or are in the direct ownership chain of the FCC licensee companies (the “Licensee Entities”) (see list of entities below). The Trust Property does not include Harry J. Pappas’s stock in Pappas Telecasting Companies, which is the manager of certain of the Licensee Entities. However, if the successor trustee is appointed, then the plan requires that Harry J. Pappas transfer his stock in Pappas Telecasting Companies to the Liquidating Trust, free and clear of any claimed exemption. The Plan contains certain conditions to the consummation of the Plan, including obtaining the necessary FCC approvals by 1/1/2012 and vesting all of the Trust Property in the Liquidating Trust (or another entity controlled by the Liquidating Trust) by 1/1/2012. Failure to meet these conditions and consummate the Plan would be grounds for conversion of the Pappases’ chapter 11 cases to cases under chapter 7 and could significantly reduce recoveries by the Pappases’ creditors.

Clear as mud? This is all part of Harry Pappas’ bankruptcy proceeding.

Posted on December 27, 2011, in Uncategorized and tagged . Bookmark the permalink. 1 Comment.

  1. The required transfer of control occured today. It is in the FCC Daily Digest.

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