Ceres Capital bankruptcy plan approved by judge
May 28 (Reuters) - A U.S. judge has approved a bankruptcy plan for Ceres Capital Partners LLC, allowing the former specialist in structured investment vehicles to sell assets after being squeezed by tight credit markets.
Judge Allan Gropper of the U.S. bankruptcy court in Manhattan on Friday approved Ceres' "prepackaged" liquidation plan to sell its remaining assets to Ivy Square Ltd for $50,000, court papers show. General unsecured creditors would recover 21 cents on the dollar, the papers show.
David Oston, a Ceres managing director, in court papers called the plan "the best possible outcome, given the challenging economic conditions facing the debtor."
SIVs raise cash by selling short-term debt to investors and investing in longer-term, higher-yielding assets. Many SIVs ran into trouble last year after investors stopped buying their debt.
Ceres, based in New York, is partially owned by an affiliate of Bermuda-based reinsurer XL Capital Ltd (XL.N), court papers show.
It filed for Chapter 11 protection on April 17, and said that as of Dec. 31, 2007, it had $57.9 million of assets -- including $52.9 million of goodwill -- and $58.5 million of liabilities.
A debtor seeking a prepackaged bankruptcy solicits approval of creditors before filing a bankruptcy petition.
Ceres said its top unsecured creditor was Bank of Montreal (BMO.TO), with $31.3 million in claims. The Canadian bank was expected to recover 25 percent of its claim, Ceres said. (Reporting by Jonathan Stempel in Bangalore; Editing by Steve Orlofsky)
