Initial Distribution of Certain Liquidating Trust Assets to Liquidating Trust Beneficiaries holding Allowed Claims

Pursuant to and in accordance with the Joint Plan of Advanta Corp., et al., under Chapter 11 of the Bankruptcy Code (as supplemented, modified, or amended, the "Plan"), the Trustee1 of the AC Trust, ASSC Trust and Advanta Auto Finance Trust has made the Initial Distribution of certain Liquidating Trust Assets to Liquidating Trust Beneficiaries holding Allowed Claims.

The Initial Distribution represents the following recoveries:

  • Retail Note claims against the AC Trust recovered 37.6 cents on the dollar;
  • General unsecured claims against the AC Trust recovered 22.3 cents on the dollar;
  • General unsecured claims against ASSC Trust recovered 83.7 cents on the dollar; and
  • General unsecured claim against Advanta Auto Finance Trust recovered 100 cents on the dollar.

The Initial Distribution was made in accordance with the terms of the Plan and reflects total cash available for distribution after accounting for appropriate and necessary reserves. Such reserves account for, among other things, Unresolved Claims and prospective Trust expenses. The Trustee expects to make additional distributions to Liquidating Trust Beneficiaries holding Allowed Claims in accordance with the terms of the Plan after, among other things, resolution of the remaining Unresolved Claims and as Liquidating Trust Assets are monetized.

Please follow the link below to view the Initial Distribution Analysis.

[INITIAL DISTRIBUTION ANALYSIS]

If you have any questions or would like additional information, please email us at ltrequest@advanta.com, or call the creditor hotline at 1-800-223-7074. Please refrain from calling Wilmington Trust as they do not have further information on these cases.

1Unless otherwise defined herein, capitalized terms shall bear the meaning ascribed to them in the Plan.

The Effective Date for the Debtors' Joint Plan Under Chapter 11 of the Bankruptcy Code Occurred on February 28, 2011

On November 2, 2010, Advanta Corp. and its affiliated debtors (the "Debtors1") filed with the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") the following documents:

  • the Disclosure Statement for Debtors’ Joint Plan Under Chapter 11 of the Bankruptcy Code (as modified, the "Disclosure Statement"), and
  • the Debtors' Joint Plan Under Chapter 11 of the Bankruptcy Code (as modified, the "Plan").

On December 17, 2010, the Court entered an order approving the Disclosure Statement, as modified (the "Disclosure Statement Order"). Based on the outcome of the vote, the Plan was overwhelmingly accepted by each of the 11 impaired accepting Classes.

On February 10, 2011, the hearing to consider confirmation of the Proposed Plan was held before the Honorable Kevin J. Carey, United States Bankruptcy Judge at the Bankruptcy Court in Wilmington, Delaware. On February 11, 2011, the order confirming the Plan was entered by the Bankruptcy Court. The Effective Date occurred on February 28, 2011 (the "Effective Date"), and the Plan (as modified February 28, 2011) was substantially consummated.

Pursuant to the Plan, the Liquidating Trustees shall make an initial distribution as soon as practicable after the Effective Date and use commercially reasonable efforts to make an initial distribution within ninety (90) days of the Effective Date. This does not mean that the Liquidating Trustees will certainly make such a distribution within such time period, but that they will use commercially reasonable efforts to do so. Additionally, no distribution, including the initial distribution, need be a complete distribution of the assets of the various trusts; due to certain contingencies, the Liquidating Trustees may be required to maintain certain reserves of assets and therefore distribute assets to the creditors by way of multiple distributions at varying times.

Please find links to the Notice of Effective Date, the Plan, Disclosure Statement, the Disclosure Statement Order, and certain other relevant documents regarding voting for the Proposed Plan and the Confirmation Hearing below:

Notice of Effective Date (Notice of (A) Entry of Order Confirming Debtors' Joint Plan Under Chapter 11 of the Bankruptcy Code, As Modified, and (B) Occurrence of Effective Date) Filed by Advanta Corp., et al., (Entered: 03/01/2011) Click Here
Chapter 11 Plan of Reorganization Filed by Advanta Corp., et al. (02/28/2011) Click Here
Notice of Non-Material Modifications to Debtors' Joint Plan, As Modified Filed by Advanta Corp., et al. (02/28/2011) Click Here
Plan Supplement in Support of the Debtors' Joint Plan Under Chapter 11 of the Bankruptcy Code (2/09/11) Click Here
Chapter 11 Plan of Reorganization (Blackline) Filed by Advanta Corp., et al. (2/08/2011) Click Here
Plan Supplement in Support of the Debtors’ Joint Plan Under Chapter 11 of the Bankruptcy Code (1/22/11) Click Here
Disclosure Statement for Debtors’ Joint Plan Under Chapter 11 of the Bankruptcy Code (12/17/2010) Click Here
Order (I) Approving the Disclosure Statement, (II) Approving Notice and Objection Procedures for the Disclosure Statement Hearing, (III) Establishing Solicitation and Voting Procedures, (IV) Scheduling a Confirmation Hearing, and (V) Establishing Notice and Objection Procedures for Confirmation of the Proposed Plan. (related document(s) 895, 896, 899, 1005, 1007, 1008, 1011, 1028, 1029, 1037, 1038, 1039) Order Signed on 12/17/2010 (Entered: 12/17/2010) Click Here
Debtors’ Joint Plan Under Chapter 11 of the Bankruptcy Code (12/17/2010) Click Here
Schedule 12.10 - List of Proofs of Claims Which are Disallowed Because They are Duplicative of the Proofs of Claims Already Filed by the Applicable Indenture Trustee Click Here
Notice of Objection to Certain Investment Note Claims and Redireserve Certificate Claims Click Here

1Please see a list of the Debtors and relevant case information under the tab labeled "Case Information".

Advanta Corp. Files to Reorganize Under Chapter 11
to Preserve Stakeholder Value

Spring House, Pa., November 8, 2009 -- Advanta Corp. (NASDAQ: ADVNB; ADVNA) announced today that it filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

Although Advanta Corp. has close to $100 million in cash and equivalents on hand, over time it would not be able to meet all of its existing obligations. The filing at this time is intended to address that shortfall in an orderly way that benefits stakeholders most fairly. The Company is reviewing both existing and potential business opportunities in connection with the reorganization.

Advanta Corp. has about $138 million of senior retail investment notes outstanding and the filing is expected to preserve the value of Advanta Corp.’s assets which will, among other things, maximize recoveries of the senior retail note holders.

Advanta Bank Corp., a wholly owned subsidiary of Advanta Corp, is not included in the Chapter 11 filing. It has been one of the nation’s largest issuers of credit cards for small business. It is currently collecting its $2.7 billion portfolio of managed receivables from 360,000 customers but the cards are not open to new charges. The Chapter 11 proceeding will not have any impact on outstanding credit card balances and customer payment obligations will continue on normal schedules.

Advanta Bank Corp.’s capital is, however, below regulatory capital requirements and over time Advanta Bank Corp. may be turned over to an FDIC receivership. Again that should not affect its customers. The parent corporation consciously decided not to fund the capital deficiency in order to preserve value for the senior retail note holders and other Advanta. Corp. stakeholders.

“The economic debacle over the last two years devastated Advanta’s small business customers and Advanta itself,” said Dennis Alter, Chairman and CEO, who is waiving his salary and any bonus during this process. In May of this year Advanta Corp. and Advanta Bank Corp. initiated a plan to limit their losses and add substantial value through the acquisition of Class A bonds issued by the Advanta Business Card Master Trust. However, the FDIC, after initially clearing the Plan, ultimately decided not to allow it to proceed.

After that Advanta Bank Corp. proposed a second plan to enable the Company to preserve value for its stakeholders and provide capital both for the Company and the Bank. However, an essential component of that plan recently also failed to secure FDIC approval leading to the Chapter 11 filing today.

Advanta Corp. has had a 59 year history of being a leading innovator in the financial services industry and of providing great value to its stakeholders, including its senior retail note holders and shareholders, prior to the recent reversals. It has also been a major civic and charitable force in the communities in which it is based, particularly in the Greater Philadelphia area.

Please continue to visit this website for additional updates on this case. The Company has also established a toll-free information line for interested parties. The number is 1-800-223-7074.

This Press Release contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The most significant among these risks and uncertainties are: 1) that the Bank will not be able to regain compliance with the capital levels and ratios required by the FDIC; 2) that the FDIC will pursue further regulatory actions against the Bank; 3) the costs, timing and success of the reorganization actions, including the Company’s ability to prosecute, confirm and consummate a plan of reorganization which has not yet been proposed; and 4) the impact of litigation and legal, regulatory, administrative and other claims, investigations or proceedings. The cautionary statements provided above are being made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995 (the “Act”) and with the intention of obtaining the benefits of the “safe harbor” provisions of the Act for any such forward-looking information. Additional risks that may affect the Company’s future performance are detailed in the Company’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q.