RNI Wind Down Corp. Announces Key Terms of Bankruptcy Plan
02 June 2006 - 7:51AM
PR Newswire (US)
SANTA CLARA, Calif., June 1 /PRNewswire/ -- RNI Wind Down
Corporation, formerly Riverstone Networks, today announced that it
had reached agreement with its Official Creditors Committee and
Official Equity Holders Committee concerning the key terms of a
consensual plan of liquidation to be filed shortly in the on-going
bankruptcy case pending in the U.S. Bankruptcy Court in Wilmington,
Delaware. The parties plan to file the proposed consensual plan of
liquidation and accompanying proposed disclosure statement in
mid-June. RNI, currently operating as a debtor-in-possession,
currently intends to pay all allowed claims of creditors in full
plus interest and expects to have sufficient cash remaining to pay
a substantial distribution to stockholders after funding certain
required reserves. One of the reserves to be established will be an
indemnification reserve set aside for claims that might be brought
against current directors or officers of the company. In an effort
to avoid unnecessary uncertainty and delay in making initial
distributions to stockholders, the Company is cooperating with a
statutory investigation by the Equity Holders' Committee into the
company's affairs. The purpose of this statutory inquiry is to
determine whether any legal basis exists for bringing claims to
recover funds for the company's bankruptcy estate. The Committee's
investigation will commence immediately, and the Committee expects
to announce the results of its investigation before the plan of
liquidation is confirmed. "A primary reason to begin the
investigation now is so that the process of establishing the size
of the indemnification reserve is based as much as possible on
facts, not speculation," said Interim President Noah D. Mesel. "We
want the reserves to be as low as reasonably possible to maximize
the initial distribution to investors, while simultaneously
preserving legitimate expectations and legal entitlements of
officers and directors who agreed to serve the company based in
part on their indemnification agreements." The Plan is scheduled to
be reviewed by the Bankruptcy Court in mid-September and
distributions to creditors and stockholders are expected to be made
by the end of September Except for the historical information
contained herein, the matters set forth in this press release,
including without limitation statements regarding the company's
plan of liquidation, payment of creditors, distributions to
stockholders, the investigation of possible claims and the
establishment of indemnification reserves the are forward-looking
statements within the meaning of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements speak only as of the date hereof and are
subject to risks and uncertainties that may cause actual results to
differ materially. These risks and uncertainties include, without
limitation, objections to any plan of liquidation filed with the
court that alter the plan or delay its confirmation, the size of
third-party claims against the company that could affect the size
of distributions to stockholders, and any claims discovered by the
Equity Committee or by third parties against individuals who have
indemnification rights that could affect the size of any
indemnification reserve. The company assumes no obligation to
update or revise these forward-looking statements. CONTACT: Noah
Mesel, Interim President, +1-408-878-6500. DATASOURCE: RNI Wind
Down Corporation CONTACT: Noah Mesel, Interim President of RNI Wind
Down Corporation, +1-408-878-6500 Web site:
http://www.riverstonenet.com/
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