AfterShock and Rive Gauche reveal their Chapter 11 Plan of Reorganization and It Seems to Try Make Things Right?

While Diamond Comic Distributor’s Chapter 11 announcement has made headlines this year, a different company declared Chapter 11 and working on its plan ever since. AfterShock Comics along with its sister company Rive Gauche Television filed for Chapter 11 Protection in December 2022 with assets and liabilities both between $10 million and $50 million and somewhere between 200 and 999 creditors.

Ever since that announcement, the companies have been working on a plan as to what to do and after a lot of delays and “still working on a plan,” there finally is one.

The plan was officially released on April 8 and we received a physical copy this past weekend, we’re listed as creditors. It’s a thick packet with a lot of information, far more than just the plan of paying back creditors.

After pouring over the over 100 pages, the plan seems like it actually wants to make right as opposed to paying pennies for what’s owed.

Here’s the takeaway:

• Counsel and individuals hired to manage the process would received 7.1% of what’s owed
• Present and Former Employees Holding Allowed Wage Claims would be 40% of what’s owed and would be paid within 9 months of the Effective Date
• Secured claims totaling roughly $12 million would receive full payment through a new ARC Secured Note which will be paid in full 4 years following the Effective Date at 10% per annum interest rate
• Unsecured Claims, totally roughly $9.979 million would be paid off 42 months following the Effective Date and 39 months for Allowed Content Creator and Post-Petition Royalty Claims. There’s also interest on those General Unsecured Claims at the rate of 5% per annum
• Unsecured Claim Insiders seem to be paid last with $4,150,402.20 owed and would also receive 5% interest per annum until Paid in Full. That group would be paid last

The plan will be paid with AfterShock/Rive Gauche’s cash on hand and any business operations after. There’s mention of a new company that would take over all of the debtor’s interest and would become the 100% parent of the reorganized debtors. A board of seven members would then oversee the new company but have no day-to-day management control. A new Chief Restructuring Officer would oversee the payments.

From reading this, and I’m not an expert, it would seem like the creditors (ie creators) would receive the full money owed plus interest, it’ll just take close to 4 years to pay it all off.

The plan needs to still be approved and those who are able to may vote in favor or against it with those not in favor needing to send back the form stating as such by May 2, 2025.