WILMINGTON, Del., March 13, 2023 /PRNewswire/ — Kabbage, Inc. d/b/a KServicing (“KServicing” or the “Company”), a prominent servicer and subservicer of small business loans, including Paycheck Protection Program loans (“PPP Loans”), announced that the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) confirmed the Amended Joint Chapter 11 Plan of Liquidation of Kabbage, Inc. (d/b/a KServicing) and its Affiliated Debtors (the “Plan”) during today’s hearing.
The Company intends to expeditiously work towards satisfying the conditions precedent to consummate the Plan and emerge from chapter 11 (the “Effective Date”). After the Effective Date, the Plan contemplates an orderly wind down of the Company’s business and operations under the supervision of the appointed wind down officer, Jeremiah Foster, for the benefit of all stakeholders.
From the outset of these Chapter 11 Cases, the Company emphasized the importance of minimizing disruption to borrowers, and today’s confirmation significantly furthers that purpose. Borrowers will receive information about their new servicer as it becomes available. Until such time, KServicing will continue servicing its loan portfolio and borrowers.
“Today marks an important milestone for KServicing, its stakeholders and its borrowers. The Company’s ability to chart its own course and present the Plan to the Bankruptcy Court for confirmation within five months of the filing date is a significant accomplishment benefiting all relevant parties. The Company’s small but capable and dedicated workforce worked tirelessly to design a complicated transition process for four different parties, all while continuing to service nearly 50,000 active loans, responding to government and partner bank inquiries regarding hundreds of thousands of loans, and operating within chapter 11,” Laquisha Milner, the Company’s Chief Executive Officer, stated. “KServicing commenced these Chapter 11 Cases in large part to complete the final stage of the wind down of its loan servicing business –– and to maximize value for all economic stakeholders.”
For more information regarding the Plan, including the Plan, the Bankruptcy Court order approving the Plan and related documents, please visit the website maintained by Omni Agent Solutions, located at https://omniagentsolutions.com/KServicing, or call the Company’s restructuring hotline at (866) 956-2138 (toll free U.S./Canada) or (747) 226-5953 (International).
Weil, Gotshal & Manges LLP is acting as the Company’s restructuring counsel, Richards Layton & Finger P.A. is acting as the Company’s co-counsel and AlixPartners LLP is acting as financial advisor, in connection with the Chapter 11 Cases.
Founded in 2010 and headquartered in Atlanta, Georgia, Legacy Kabbage (a predecessor of KServicing) was one of the leading fintech providers of working capital to small businesses. Legacy Kabbage began as a proprietary online lending platform providing loan services to over 250,000 American small businesses, many of which were businesses that struggled to receive adequate funding through traditional banking institutions. For over a decade, Legacy Kabbage offered a variety of services to small business owners, including providing small business loans, access to flexible lines of credit, business checking accounts, online bill payment methods, cash flow visualization tools, and e-gift certificates through its website and software application. From 2020-2021, the Company provided and facilitated necessary funding to small business owners through PPP loans during the COVID-19 pandemic. The Company’s existing technology infrastructure spearheaded its PPP work, which led to a total of $7 billion in loans being originated by the Company. The origination and servicing of PPP and small business loans to eligible borrowers was critical during a time of unprecedented health and economic uncertainty brought about by the COVID-19 pandemic.
On August 16, 2020, much of the Company’s business was sold to American Express Travel Related Services Company, Inc. pursuant to an executed Agreement and Plan of Merger. As a result of the merger, KServicing now operates in a limited capacity as (i) a servicer and subservicer of PPP Loans, (ii) a software services provider for lenders of PPP Loans, and (iii) a servicer of a minor portfolio of non-PPP small business loans.
To learn more about us, please visit www.kservicing.com. Kabbage is a trademark of American Express used under license; Kabbage, Inc. d/b/a KServicing is not affiliated with American Express.