Hogan Lovells guides Wave Computing Creditors in successful Chapter 11 reorganization

Wave Computing is a Silicon Valley information technology processor company founded by prominent tech investor Dado Banatao. A Hogan Lovells team, along with the Committee’s Financial Advisor, Dundon Advisers, LLC, assisted the Committee in obtaining a greatly enhanced recovery for unsecured creditors.

The confirmed plan of reorganization became effective on February 21, 2021. Under the terms of the plan, general unsecured creditors will be paid through a liquidating trust that will have the rights to proceeds from certain accounts receivable generated by Wave, a secured loan owed by reorganized Wave Computing to the trust, and certain significant litigation claims that the trust may prosecute. 

The company entered bankruptcy valuing itself at less than the amount of its prepetition secured debt and debtor-in-possession financing, which could have resulted in no recovery to unsecured creditors. Through the efforts of the Committee and other parties, the plan will provide up to a full recovery for general unsecured creditors. Although the  disclosure statement projected a recovery to general unsecured creditors of 70.7% to 83.8%, that was prior to the increased value provided in the Plan as a result of a successful auction process. The estimate provided at the Confirmation Hearing was that general unsecured creditors could receive a recovery of 80% to 100% of their allowed claims.

The Hogan Lovells team was led by Los Angeles Business Restructuring and Insolvency partners Rick Wynne, David Simonds, and Bennett Spiegel, with support from Los Angeles senior associate Edward McNeilly and New York associate Sara Posner. They were supported by New York partners Mehtap Cevher Conti and Stuart Morrissy, and senior Associate Andrew Ceppos (Finance); Los Angeles partners Ann Kim and Stephanie Yonekura, Boston counsel Julia McLetchie, and senior associate David Bastian (Litigation); Silicon Valley partner Jane Ross and Los Angeles senior associate Annie Kang (M&A); New York partner Scott Friedman (Tax); and Washington, D.C. partners Gejaa Gobena and Jamie Wickett (Global Regulatory).