RCS Capital Corporation announced today that, as part of its previously announced plan to transform to a Cetera-only independent retail business, certain of the Company's holding companies of the Company's broker-dealers, as well as certain other guarantors of the Company's First and Second Lien debt, have filed a pre-packaged plan of reorganization under Chapter 11 with the United States Bankruptcy Court for the District of Delaware.  This significant milestone is expected to be the final Chapter 11 filing needed to successfully conclude the Company's restructuring process.

Key highlights of this filing process:

• the filing excludes Cetera's broker-dealers and registered investment advisors; as disclosed previously, these entities will NOT be included in these Chapter 11 filings;
• the broker-dealer holding companies that serve as guarantors of the RCS Capital debt will utilize a "pre-packaged" plan of reorganization to extinguish their guarantees associated with the First and Second Lien debt;
• only these First and Second Lien secured guarantees will be impaired; all other liabilities of the entities in this filing will be unaffected and "ride through" the proceeding;
• the pre-packaged plan has been accepted by holders of 78.7% of the outstanding First Lien debt, and 90.3% of the Second Lien debt, satisfying the requisite thresholds for confirmation under Chapter 11;
• Cetera payroll and benefits, vendor payables and all other liabilities at these entities, including the deferred compensation plans, will continue as is and will not be impaired or modified.

The Company believes that the pre-packaged plan meets all of the requirements for confirmation under Chapter 11 and, subject to bankruptcy court approval, the restructuring process will be completed in May of 2016.  The Company noted that, upon such completion, Cetera Financial Group will operate as a wholly-owned, privately-held business of RCS Capital, which will be owned by a group of institutional investors experienced in the financial services industry.

As previously announced, and as an integral part of the balance sheet restructuring, a group of the existing lenders have fully committed to invest $150 million in new capital which the Company and the Cetera senior leadership team intend to deploy to make continued significant investments in technology, advisor growth and service enhancements in what is already an industry-leading platform for the financial advisors and financial institutions that Cetera supports.

The reorganization plan includes a retention program for eligible Cetera Financial Group-affiliated advisors in the new company. The secured lenders have also agreed that the reorganization will not affect the current advisor deferred compensation arrangements.

David Orlofsky, Chief Financial Officer and Chief Restructuring Officer of RCS Capital and Senior Managing Director of Zolfo Cooper, the Company's restructuring advisory firm, said, "We believe this is one of the last major steps needed to position Cetera Financial Group for long-term success and continued industry leadership.  We're pleased by the progress we are making towards successfully concluding the restructuring process on a highly expedited basis, and we congratulate the seasoned and disciplined senior management of Cetera Financial Group on their remarkable leadership throughout this period.  We are confident that the Cetera business is extremely well positioned to create value for its advisors, institutions, employees and future owners going forward."

The restructuring and new investment is subject to regulatory, court and other approvals, and is expected to be completed in May of 2016.