In a new court motion, Prospect Park Networks has asked to convert its Chapter 11 bankruptcy plan to a Chapter 7 because they have been unable to pay the fees owed to their legal counsel, Jones Day, in the breach of contract suit against Disney/ABC over ONE LIFE TO LIVE. PPN had hoped that selling $6 million in tax credits it had received for filming the OLTL and ALL MY CHILDREN reboots in Connecticut would pay for the law firm to represent them in the $95 million lawsuit, but the proceeds weren’t enough to keep Jones Day as their counsel or find a suitable replacement once PPN had paid off their largest claim holder.
“The best hope for a meaningful recovery to creditors is successful prosecution or settlement of the ABC litigation,” reads the motion. “The debtor and the debtor’s counsel have done everything to keep the ABC litigation alive for the benefits of creditors.”
Under the Chapter 11 filing, PPN would have liquidated the estate, but the company’s creditors bashed that plan, claiming that the disclosure statement failed to provide information about how the production company valued the contract suit with ABC (its primary asset) or how that litigation would be handled under the plan. Switching to Chapter 7 bankruptcy would effectively allow PPN to have their debts canceled. (However, PPN is requesting that a trustee be appointed as quickly as possible to oversee the ongoing ABC litigation.) Explaining in the motion that their revenue stream from Hulu is set to expire on July 31, rendering the estate “administratively insolvent because the outstanding and unpaid fees awarded to estate professional exceeds the amount of cash the Debtor has on hand.”
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