Bankruptcy News

We've summarized the latest docket activity and news for publicly traded companies currently operating under U.S. Bankruptcy Court protection.

Bankruptcy/Chapter 11

Furniture Brands International Plan Filed

Furniture Brands International filed with the U.S. Bankruptcy Court a Chapter 11 Plan of Liquidation and related Disclosure Statement. According to the disclosure statement, “The Plan provides for the distribution of cash proceeds from the liquidation of the Debtors’ assets, including proceeds from the HHG Sale and sales of residual assets that were excluded from the HHG Sale. The distribution of such cash proceeds to creditors shall be in full and complete satisfaction of all claims against the Debtors’ Estates. To that end, the Plan provides for the treatment of Claims against the Debtors and Equity Interests in the Debtors, as well as the settlement of a number of potential litigation issues, including issues regarding substantive consolidation, the validity and enforceability of Intercompany Claims, and the allocation of cash proceeds from the sale of the Debtors’ assets among the Estates. In addition, the Plan implements key provisions of the PBGC Settlement, thereby enhancing the funds available for distribution to certain creditors as provided for in the PBGC Settlement….Pursuant to the Plan, on the Effective Date, all of the Estates’ Assets will vest in and be transferred to the Liquidating Trust. The Liquidating Trust shall be administered by the Liquidating Trustee who shall, among other things, liquidate the Estates’ remaining assets, resolve any disputed Claims, wind down the affairs of the Debtors, prosecute Causes of Action, and make Distributions in accordance with the Plan….Further, as described in the PBGC Settlement, the Pension Benefit Guaranty Corporation (‘PBGC’) will contribute $6 million of its initial aggregate pro rata distribution on its General Unsecured Claims to (a) any holder of an Allowed General Unsecured Claim other than PBGC that (i) either votes such Claim to accept the Plan or does not vote such Claim to reject the Plan and (ii) does not object to confirmation of the Plan and (b) any subsequent holder of such Claim to the extent of such Claim (collectively, the ‘Consenting Creditors’). Although holders of Convenience Claims will not receive a distribution from this $6 million contribution, the effect of that contribution on recoveries was taken into account in determining the distribution percentages for Convenience Claims.”

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