Aereo Inc., the company behind a now-defunct TV-streaming
service, won final court approval Monday of a liquidation plan that
will divvy up the proceeds from the sale of the company's
assets.
Judge Sean Lane of the U.S. Bankruptcy Court in Manhattan said
he would sign off on the plan following a brief hearing Monday
afternoon.
"It was a very difficult, challenging case," Judge Lane said at
the hearing. "I think it's a case that could have easily descended
into constant warfare."
But the plan, under which most creditors will be paid in full,
enjoyed widespread support in advance of Monday's hearing.
Unsecured creditors, slated to receive about 10% of what they are
owed, voted unanimously to support the proposal.
Aereo effectively shut down a year ago following a landmark U.S.
Supreme Court loss last June and sought chapter 11 protection in
November. Under the liquidation plan, proceeds from the sale of the
company's assets are earmarked to pay a $950,000 settlement the
company reached with broadcasters to put an end to litigation over
the legality of Aereo's business model.
"There was so much animosity at the outset of this case," said
Robert Kugler, a lawyer with Stinson Leonard Street LLP who
represents unsecured creditors. "The fact that we were able to
prevent the estate's assets from being destroyed to pay the
expenses of unnecessary litigation was a significant victory for
all the parties."
Unsecured creditors owed between $7 million and $8 million will
recover 10.7 cents on the dollar, court papers show. Unlike many
companies in bankruptcy, Aereo has no secured debt; its other
bankruptcy expenses include tax payments, professional fees and
other administrative expenses.
In March, Aereo completed sales to TiVo Inc., RPX Corp. and
others that brought less than $2 million to the bankruptcy estate.
Aereo had expected its auction to bring in at least $4 million and
possibly upward of $20 million, according to court filings.
TiVo bought Aereo's customer lists, name and other trademarks
for about $1 million, while patent-aggregator RPX paid $225,000 for
its patent portfolio. Alliance Technology Solutions bought
equipment from Aereo for about $300,000 as well as hard drives in a
separate deal previously approved by the court.
Until its shutdown, Aereo subscribers could stream local TV
stations' signals through the company's cloud-based antenna and DVR
services for as little as $8 a month. The company raised nearly $97
million in venture capital during its 3 1/2 years of existence.
Broadcasters said Aereo's service infringed on their copyrights,
and last year, the U.S. Supreme Court agreed. Even after the
Supreme Court ruled that the business violated copyright laws, the
broadcasters continued to fight Aereo's every move.
Sara Randazzo contributed to this article.
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