Chapter 11 Background Information

 

            On December 31, 2013, NLI filed a voluntary Chapter 11 petition with the United States Bankruptcy Court for the Middle District of Tennessee (the “Court”).  The petition was assigned Case No. 13-10974-RM3-11, and the proceedings commenced by the petition are referred to herein as the “Case,” or the “Chapter 11 Case.” 

            Chapter 11 is the general reorganization chapter under the federal bankruptcy code (the “Code”).  Although reorganization is the stated goal of Chapter 11, the Code also contemplates that an orderly liquidation of the business and affairs of a company may be accomplished in Chapter 11.  NLI’s management has commenced the case with the goal of an orderly liquidation, because it believes that such will likely realize the maximum value for NLI’s assets. 

            In furtherance of the goals of Chapter 11, the Code imposes an automatic stay of all actions by creditors to perfect, enforce or realize upon their claims.  Correlatively, the Code prevents the company from making payments on its pre-petition obligations before confirmation of a Chapter 11 plan or other special order of the Court.  Accordingly, NLI advised all donors who were expecting a payment on or about January 1, 2014, under a CGA or ChIP, that such payments cannot be made until further order of the Court.

            Shortly after filing the Case, NLI made available to the Clerk of the Court a mailing list containing the names and mailing addresses of all known creditors and other parties in interest.  The Clerk’s office used the mailing list to mail a formal notice of the commencement of the Case to all such creditors and parties in interest.  If you did not receive this notice, you should make inquiry, as that could indicate that your name and mailing address are not on the mailing list or are listed incorrectly. 

            Since then, NLI has further reviewed its files and records and filed with the Court an updated list with additional names and updated addresses.  It will continue to do so as information is brought to its attention.

            A committee of unsecured creditors (the “Committee”) was created.  It consists of several individuals who hold among the largest claims against NLI.  The Committee monitors the case and expresses its views on documents and proposed actions.  It has engaged counsel, the law firm of Bradley, Arant, Boult Cummings.  Lead counsel is Mr. William L. Norton, III, whose telephone number is 615-252-2397 and whose email address is [email protected].

            The company, acting through its special counsel, has from time to time provided notices of proposed actions in the Case to creditors and parties in interest.  It continues to do so.  You should review these notices carefully, as they may affect your rights and claims against NLI.  You may also wish to consult an attorney knowledgeable of proceedings under the Code for advice about what, if any, response you may wish to make to the action proposed in any such notice.

            On April 3, 2014, the Court entered an order approving the procedure for the administration of claims against NLI in the Case.  Please return to NLI’s home page and click on the link called “Claims against NLI” for further information and documents.

            On April 30, 2014, NLI filed with the Court its Chapter 11 plan of liquidation and a disclosure statement to accompany same. A first amended plan of liquidation and an amended disclosure statement were filed on June 19, 2014. Please return to NLI’s home page and click on the link called “Plan and Disclosure Statement” for further information and documents.

            Naturally, the members of NLI, its board and its management deeply regret the necessity of filing the Chapter 11 Case.  They struggled long and hard to find a viable alternative.  In the judgment of NLI’s management, the Chapter 11 Case offers the best opportunity to maximize the value of the company’s assets and ensure fairness and equal treatment of all creditors, while giving due attention to NLI’s mission.  Management, therefore, believes that the Chapter 11 filing will prove to be in the best interests of all creditors and other parties in interest.