Bankruptcy News

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Bankruptcy/Chapter 11 / Consumer Durables & Apparel

Coldwater Creek Plan Filed

Coldwater Creek filed with the U.S. Bankruptcy Court a Second Amended Joint Plan of Liquidation and a related Disclosure Statement. According to the Disclosure Statement, “The Plan provides for the liquidation and conversion of all of the Debtors’ remaining assets to cash and the distribution of the net proceeds realized from the assets to creditors holding Allowed Claims in accordance with the relative priorities established in the Bankruptcy Code. After payment in full in Cash of the Term Loan Claims, to the extent and in the amount that such Claims are Allowed, the Plan contemplates the formation of a Liquidating Trust and appointment of a Liquidating Trustee upon the Effective Date to, among other things, resolve Disputed Claims, make distributions to Holders of Allowed General Unsecured Claims, investigate and, if appropriate, pursue any Claims and Causes of Action not otherwise released under the Plan, make distributions to Holders of Allowed General Unsecured Claims and close these Chapter 11 Cases. Because under the Plan the Debtors’ directors and officers and the Term Loan Lenders and the ABL Lender will all be released, the Liquidating Trustee would not be able to pursue Claims and Causes of Action against them, but could pursue Claims and Causes of Action against the Holders of Allowed General Unsecured Claims, who will not be similarly released. The Plan constitutes a separate stand-alone plan of liquidation for each Debtor.…The Allowed Term Loan Claims shall be paid in full in Cash, prior to funding the Liquidating Trust, the vesting of the Liquidating Trust Assets in the Liquidation Trust or making any distributions to the Holders of Allowed Claims entitled to receive distributions from the Liquidating Trust in accordance with Article III of the Plan. To the extent provided for in the Plan, sufficient monies shall be set aside by funding of the Disputed Claims Reserve for payment of any Claim or portion of a Claim that is Disputed.”

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