Unsecured creditors of RCS Capital Corp. (RCAP) are threatening to object to the company’s proposed restructuring plan if they don’t get more information and more time to evaluate the proposal.
The official committee of unsecured creditors said in a court filing last week that it has just begun to evaluate the plan and needs more information on RCAP’s financial situation, on the liens held by secured creditors, and on the potential legal claims that could be filed against the company.
RCAP, the holding company for the Cetera Financial Group of broker-dealers, filed for Chapter 11 bankruptcy in January.
The committee, which is made up of RCAP’s five largest unsecured creditors, said it was also assessing legal limitations proposed for a creditor trust, which would be set up to compensate unsecured creditors.
The unsecured creditors said they might seek modifications in the restructuring plan, and told the federal bankruptcy court they reserved their right to object to the plan and its proposed effective date of May 16, 2016.
In its own court filing last month, RCAP has claimed that the restructuring plan is “extremely favorable for all creditors because it achieves a deleveraging of the company’s balance sheet through consensus with the overwhelming majority of the company’s creditors.”
But the unsecured creditors took issue with that claim.
“The ‘consensual’ restructuring lauded by [RCAP] provides relatively little value to holders of general unsecured claims and requires unsecured creditors to review and pass judgment on [the plan] at a lightning speed,” the creditors’ committee said in its filing last week.
RCAP has projected a six percent recovery rate for an estimated $202 million in general unsecured claims.
Counsel for the creditors’ committee, David Feldman, a partner at Gibson, Dunn & Crutcher, said more unsecured claims could emerge. He declined to comment further.
“We are constructively engaged with the unsecured creditors committee and are optimistic that a successful resolution will be achieved,” said Mason Allen, RCAP general counsel, in an email.
Mason added that the company’s restructuring plan has the support of 86% of first- and second-lien lenders. 
Members of the creditors’ committee are: Wilmington Savings Fund Society FSB (which is a successor trustee to some RCAP convertible notes); VEREIT Operating Partnership LP (formerly under the American Realty Capital Properties name); RSM US LLP (an audit and consulting firm); Geneos Wealth Management Inc. (a broker-dealer firm); and William Mello (co-founder of J.P. Turner, which RCAP bought in 2014).