The plan will keep open at least 1,400 GNC stores and save thousands of jobs.
The plan was approved by Judge Karen B Owens of the U.S. District Court for the District of Delaware, Bloomberg Law reports. It follows a global settlement between GNC, the creditors committee, Harbin, and other creditors. It will pay unsecured creditors from a pool of $4.5 million in cash, plus another $20 million in convertible and non-convertible notes payable in up to eight years.
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Unsecured creditors can choose to be treated in a “convenience class,” created for holders of claims up to $50,000. Those creditors—or those with larger claims that choose to limit those claims to $50,000—should recover about 7% of their claims, as stated by attorney Richard Levy of Latham & Watkins LLP in a hearing on Wednesday. Other unsecured creditors will likely receive a smaller percentage of their claims.Some of the future payments to unsecured creditors will come from notes issued by Harbin.