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  1. ARO Liquidation, Inc. (“Company”) filed a voluntary petition under Chapter 11 of the Bankruptcy Code on May 16, 2016 – case 16-11275 (SHL) (“Bankruptcy Case”) currently pending in the Bankruptcy Court for the Southern District of New York (“Bankruptcy Court”).
  2. Development Specialists, Inc. (“DSI”) was retained to provide management and restructuring services and William A. Brandt Jr. of DSI was designated as the Chief Restructuring Officer (“CRO”).
  3. As part of the wind down of the operations and liquidation of the remaining assets, the Company is selling what is commonly referred to as the Visa/MasterCard Interchange Fee Litigation Claim (“Claim”). The Claim is the subject of continuing class action litigation related to the possible recovery of Payment Card Interchange Fees and Merchant Discount Fees.

Sale Process:

  1. The Company has accepted a stalking horse bid (“Stalking Horse Bid”) of $1,000,000 for the Claim.
  2. The Company has filed a motion (“Motion”) with the Bankruptcy Court to approve bidding procedures which include an auction (the “Auction”) of the Claim. The motion is docketed as Doc. 1601 and can be accessed on the Prime Clerk (the Notice and Claim Agent in the Bankruptcy Case) website.
  3. The Motion is scheduled to be heard by the Bankruptcy Court on January 30th. Interested parties are encouraged to check the Prime Clerk website to review the order on the Motion once it is entered. The information in this Notice may be superseded if the Motion is not approved without change.
  4. Assuming the Motion is approved without change:
  5. Any party wishing to make competitive offers for the Claim will need to become a Qualified Bidder (“Qualified Bidder”) to participate in the Auction.
  6. Qualified Bidders must, by no later than February 9, 2018, at 4:00 pm (prevailing Eastern Time)(“Bid Deadline”) submit a written agreement on substantially the same terms of the Stalking Horse Agreement, including an exhibits and schedules, and signed by an authorized representative of the bidder (a more comprehensive description of the requirement to be a Qualified Bidder is outlined in the Company’s Motion).
  7. The Stalking Horse Bid will enjoy bid protection in the amount of $20,000 and a breakup fee in the amount of $30,000, such that a qualified overbid will need to be in an amount no less than $1,050,000. No bidders other than the current stalking horse bidder will be allowed bid protection, break-up fee or reimbursement from the sale proceeds of any kind.
  8. If any qualified bids are received by the Bid Deadline, an open auction for parties submitting qualified bids, will take place at 10:00am (EST), Monday, February 12, 2018, at the law offices of TOGUT, SEGAL & SEGAL, LLP, located at One Penn Plaza, Suite 3335, New York, NY 10119. Qualified bidders may appear by telephone, only if arranged in advance.
  9. A closing on the sale of the Claim will be scheduled for as soon as possible after the sale hearing which is currently scheduled for Thursday, February 15, 2018, at 11:00 am (prevailing Eastern Time).

More Information:

  1. Parties interested in gathering further information on the Claim and the sale process, should contact John Wheeler of DSI at [email protected] or 312-263-4141.

About DSI:

  1. About DSI. For more than 35 years, DSI has been a leading provider of management consulting and financial advisory services, including turnaround consulting, fiduciary roles, financial restructuring, litigation support, wind-down oversight and forensic accounting services. The company is headquartered in Chicago and has offices in New York, Los Angeles, San Francisco, Miami, Philadelphia and Columbus, Ohio. Internationally, DSI has an office in London. For more information about DSI, visit http://dsi.biz/.

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