ALCO Stores proposes plan of liquidation to distribute estate assets

By Kali Hays

New York, Feb. 18 – ALCO Stores, Inc. filed a Chapter 11 plan of liquidation and related disclosure statement on Feb. 18 with the U.S. Bankruptcy Court for the Northern District of Texas.

As previously reported, ALCO had an agreement with a joint venture comprised of Tiger Capital Group LLC, SB Capital Group LLC and Great American Group LLC to conduct going-out-of-business sales that began on Nov. 21.

The sales included 198 ALCO locations in 23 states involving $260 million of inventory, fixtures and equipment for liquidation.

Under the sale agreement, the company was guaranteed to receive 91% of the cost value of the merchandise in the store-closing sales conducted through Jan. 31.

However, the sale termination date for some store locations was extended through March 8.

During the extended sale period, ALCO will receive 3.5% of gross sales, while expenses related to the sale will be covered by the agent.

In addition to the store closing sales, ALCO received court approval to sell a distribution center located in Abilene, Kan. to Orscheln Supply LLC for $3 million in December.

The company also sold two separate real property assets located in Moab, Utah, and Sierra County, N.M., for $1.38 million and $300,000, respectively.

FIDC XL LLC purchased the Utah property, and Lucky Turtle, LLC purchased the property in New Mexico.

The liquidation plan calls for the establishment of a liquidating trust to collect and distribute all monetized assets of the estate and to pursue all causes of action.

Specific treatment of claims under the plan include the following:

• Holders of secured claims will be paid in full in cash;

• Holders of general unsecured claims will receive a proportionate share of cash proceeds available in the liquidating trust; and

• Holders of subordinated claims and all equity interest claims will receive no distribution.

ALCO is a Coppell, Texas-based broad-line retailer primarily operating in underserved communities. The company filed for bankruptcy on Oct. 12 under Chapter 11 case number 14-34941.

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