Advanta Corp. expects to repay its investors 64.4% to 100% of the value of their retail notes as part of its proposed liquidation plan, the bankrupt small-business card issuer said.
The Conshohocken, Pa., issuer filed for bankruptcy protection from creditors last year after racking up steep losses during the economic downturn. Advanta, which owes investors $140.6 million, filed its liquidation plan Nov. 2 in U.S. Bankruptcy Court in Wilmington, Del. It said it had about $100 million in cash and equivalents when it filed for bankruptcy. The company says it also resolved litigation with the Federal Deposit Insurance Corp. and secured control of its credit card receivables.
"Because of these actions, investment-note holders and RediReserve certificate holders, who are our largest group of creditors, could potentially recover all of their investment, which has been a key goal of ours in these otherwise unfortunate circumstances," Dennis Alter, Advanta's chairman and chief executive, said in the Nov. 2 press release.
The court is scheduled to consider the bankruptcy plan for approval next month. If it is approved, Advanta will send the plan to eligible creditors for a vote. Advanta anticipates creditors' approving the plan "sometime in early 2011."
