To have received the package of documents, you would have had to have filed a claim in the bankruptcy case. I described my own claim in a January thread you can find
here. If you filed a claim and did not receive a package, give it a couple of days (I JUST got mine).
The package of documents includes:
1) ballot (to vote to accept or reject the plan);
2) Warranty Claims Election Form;
3) CD containing copies of the plan and disclosure statement;
4) notice regarding the deadlines to vote on the plan
#1 and 2 above are the important documents concerning warranty claims. There are two options for warranty holders (owners) under the plan:
Option 1: get a monetary payout on a percentage of the claim you filed with the bankruptcy court (they estimate a distribution between 8-26% on the dollar); or
Option 2: agree to the warranty by Wanxiang which provides up to $2,000 per vehicle (until Wx pays out $400,000 in total), with chance of an increasing if Wx resumes Karma production and makes at least 250 more of them. The creditors committee is negotiating to see if they can get enhanced warranty benefits from Wanxiang, but there are no guarantees. There are also no guarantees that Wx will build 250 more Karmas.
Either option has uncertainties: in option 1, will it be 8% or 26%... or neither? It also would depend on the amount of your claim: was it for $40K, or "unliquidated" (I have no idea how "unliquidated" would be treated)? In option 2 the uncertainty is: will you make a claim before the $400K limit is exhausted, will that $400K limit be increased if Wx resumes production? Who knows.
What IS certain: You CAN’T get both money from the bankrupt company AND have Wainxiang honor warranty claims, so you have to make a decision: either deal with buyer (Wx) going forward on any warranty claims, or wait and see what distribution you will get (cents on dollar) from the bankrupt company.
If you are interested in Option 1, you have to check the box and fill out the "warranty claims election form" (there are 2 boxes that you need to check). In addition, page 3 of the ballot has boxes that you must check to either accept or reject the plan.
If you are interested in Option 2, you do not have to fill out the warranty election form as you will automatically be provided the warranty from buyer. However, you should fill out the ballot and check the box on whether to accept or reject the plan.
Third Party Releases. On page 4 of the ballot there's a box you can check if you do NOT want to release the various parties under the plan. This might matter if you have any action against any of the prior management or buyer, but there is not necessarily any benefit to you if you give the release. If you do not check the box, you are automatically giving the release.
The deadline to submit the ballot and warranty election form is July 16 – the package you received should have come with a self-addressed envelope on where it needs to go.
I can't give anybody any legal advice - all I can do is explain what's in the package. All the uncertainties above make it extremely difficult to advise any particular owner what they should do - I may even make the wrong choice for myself!
