Rhodes files liquidation plan; unsecured creditors to recover leftover liquidation proceeds

By Caroline Salls

Pittsburgh, Oct. 19 - Rhodes, Inc. filed its first amended plan of liquidation and related disclosure statement Tuesday with the U.S. Bankruptcy Court for the Northern District of Georgia.

The plan will be funded with liquidation proceeds, including any cash received from the collection of outstanding accounts receivable, the sale of the company's assets and the prosecution or settlement of any causes of action.

Joel Dugan has been appointed liquidation agent and will be responsible for distributing the liquidation proceeds as detailed in the plan.

Treatment of creditors under the plan include:

*Holders of priority secured claims will receive 100% recovery in cash;

*Holders of general unsecured claims will receive a share of any liquidation proceeds remaining after payment of administrative expenses, priority tax claims and debtor-in-possession claims;

*Holders of unsecured convenience claims of less than $500 will receive a cash payment of 25% of their claim;

*Holders of Rhodes Holdings and Rhodes Holdings II unsecured claims, as well as holders of old equity interests, will receive no distribution under the plan.

A hearing on approval of Rhodes' disclosure statement is scheduled for Nov. 17.

Rhodes, an Atlanta-based furniture retailer, filed for bankruptcy on Nov. 4, 2004. Its Chapter 11 case number is 04-78434.

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