On April 18, 2017, Judge Laurie S. Silverstein entered an order confirming Violin Memory, Inc.’s (the “Debtor”) plan of reorganization (the “Plan”). The Debtor filed a voluntary petition under Chapter 11 of the Bankruptcy Code on December 14, 2016. Headquartered in Santa Clara, California, the Debtor is a developer and supplier of differentiated flash-based storage systems that service the high-speed applications and complex network infrastructures of sophisticated worldwide enterprises.
The Plan confirmation follows a deal based on a plan support agreement (the “PSA”) that was approved by the Court on February 8, 2017. Pursuant to the PSA, the Debtor was sold for $23 million to VM Bidco LLC, an affiliate of Quantum Partners LP (“QP”). The sale price consists of (i) an $8 million debtor-in-possession financing which will convert into an exit facility, and (ii) $15 million in cash for recoveries under the Plan in which QP will receive all equity interests in the reorganized Debtor. The Plan, which was accepted by more than 96% of the unsecured creditors, will provide an estimated 7.5%-8.5% recovery to unsecured creditors.
The Plan confirmation is a great outcome especially when considering the fact that the Debtor filed for chapter 11 after it failed to sell its assets out of court and to secure a stalking horse bidder or debtor-in-possession financing.
To see the confirmation order for the case, please click here.