Thu 08/06/2020 09:28 AM
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Relevant Documents:
Voluntary Petition
First Day Declaration
Plan
Disclosure Statement

The above relevant documents related to the Prysm Inc. bankruptcy filing are available only to current First Day by Reorg clients and trialists. Please request access to continue following this and other bankruptcy filings in the Americas

Prysm Inc., a Milpitas, Cal.-based developer, marketer and seller of large-format displays using proprietary LPD technology, filed for chapter 11 protection on Aug. 5 in the Bankruptcy Court for the District of Delaware. The company reports $4.6 million in assets and $273.6 million in liabilities (including $265.8 million in secured claims). The debtor is represented by Gellert Scali Busenkell & Brown. The case number is 20-11924.

Prysm is pursuing a prepackaged plan and has already received supporting votes from the two classes of voting claims. Plan sponsor ESW Capital LLC will acquire the debtor and reorganize around its software business, while contributing the debtor’s hardware business and certain related assets into a newly formed entity for the benefit of the debtor’s lenders.

According to the first day declaration of Amit Jain, since its formation in 2005, the debtor has invested in research and development, marketing, sales, service and support with the objective of “making LPD displays a leader in the global market for large-format displays” but to date has not achieved profitability on a GAAP or cashflow basis and has federal NOL carryforwards “in excess of $300 million.” Since December 2015, the debtor has financed its operations through the issuance of senior secured promissory notes, as follows:
Prysm Inc. bankruptcy filing senior secured promissory notes from the First Day by Reorg team

Key terms of the plan are:

  • The funding $12 million in cash consideration by ESW “plus the unfunded portion of the DIP Financing;”

  • The payment in full of the secured claim of GII Prysm Investments, the debtor’s first priority secured creditor (unless GII elects to instead receive a pro rata portion of the equity in Hardware NewCo);

  • The contribution of the debtor’s hardware assets and certain cash to a newly formed “Hardware NewCo” entity and distribution of the equity in Hardware NewCo to the debtor’s other secured noteholders (and to GII if GII elects such treatment instead of a cash payment of its senior secured claim);

  • The reorganization of the debtor by retiring, cancelling, extinguishing and/or discharging prepetition equity and issuing new equity in the reorganized debtor to ESW; and

  • $500,000 will be contributed from plan consideration tol fund general unsecured creditor recoveries; and

  • ESW will fund up to $3 million in DIP financing, including up to $750,000 on an interim basis.


The First Day by Reorg team will provide a full summary once the first day briefing is complete.
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