The creditors' committee in the Kleid Co. bankruptcy case said last week that it is pleased with the structures in place to disburse payments to creditors and encouraged all mailers who owe money to Kleid to pay their balances.
Members of the committee confirmed that payments sent out the week of May 19 have been received by creditors. Kleid, New York, has collected $2.9 million since filing for Chapter 11 bankruptcy protection March 11 and will have disbursed $1.9 million by June 5. About $6.2 million remains to be collected.
The payment schedule has been revised and finalized with approval of the committee. A temporary order calling for 85 percent of receivables to be disbursed has been revised to 90 percent. Judge Stuart Bernstein signed the order May 21.
“We feel very good about the 90 percent amount,” said Corbin Wilkes, vice president of finance for Kiplinger Washington Editors and chairman of the creditors' committee. Wilkes said Kiplinger — which is owed $970,333 — has made 70 percent of its payments (about $400,000) to Kleid and expects to pay off its balance within two weeks.
Of the remaining 10 percent, 5 percent will cover Kleid's collection and administration costs. This reflects an increase of 1 percent from the original 4 percent in court documents because of a protracted collection timetable and additional legal costs. Should administrative costs not consume the full 5 percent of receivables, Wilkes said the remainder would be turned over to creditors.
The last 5 percent is being held for eventual disbursal to list owners based on “black hole'' losses. Black hole is the phrase used by the list industry to describe moneys collected by Kleid but consumed in the operation of its business before filing for Chapter 11. It also is the first official declaration of Kleid's practice of floating receivables to cover operating expenses. This 5 percent sum will be allocated to list owners based on their relative share of black hole money.
The committee has hired someone from the list brokerage/management industry to ensure that outgoing receipts are being processed properly and are supported by incoming checks. As the process stands, there is a 10-day delay between the receipt of payments and their disbursement to creditors.
“We're pleased with the progress of negotiations and also pleased with Kleid's ability to handle the processing of receipts and payments to list owners,'' Wilkes said.
Any outstanding claims against Kleid had to be filed in the court by May 31. A final hearing on the bankruptcy case is scheduled for June 30.
