Former Furniture Brands to file plan based on pension termination deal

By Caroline Salls

Pittsburgh, April 4 - FBI Wind Down, Inc., formerly Furniture Brands International, Inc., reached an agreement with its official committee of unsecured creditors and the Pension Benefit Guaranty Corp., according to an 8-K filed Friday with the Securities and Exchange Commission.

FBI Wind Down will file a Chapter 11 plan that incorporates the terms of the settlement and has been approved by the committee and the PBGC.

The committee and the PBGC agreed to support a liquidating plan that provides for the partial substantive consolidation of the FBI Wind Down debtors, which will reduce the impact on other general unsecured creditors from the debtors' liability to the PBGC.

Under the settlement, the company will enter into an agreement that will terminate its pension plan and appoint PBGC as statutory trustee and result in the dismissal with prejudice of a pending action filed by the PBGC against FBI Wind Down in the U.S. District Court for the Eastern District of Missouri to enforce PBGC's determination that the company's pension plan should be terminated.

In addition, the PBGC agreed to reduce its claims against FBI Wind Down to roughly $300 million from more than $340 million.

The PBGC also agreed to a secured claim of a$2.17 million, which will be satisfied from $25 million that was previously placed in escrow to satisfy its claims against the proceeds from the sale of the company's foreign non-debtor affiliates.

The remaining funds in escrow will be released on the plan effective date.

The settlement also requires the PBGC to make available $6 million of its initial distribution under the plan to holders of allowed general unsecured claims who either vote to accept the plan or do not vote to reject it and do not object to confirmation of the plan.

The company said the PBGC's contribution of this additional cash will be administered by the liquidating trustee to be appointed under the plan.

Also, if the net proceeds of litigation brought by the liquidating trustee exceed $20 million, the PBGC will make 20% of its pro rata share of the excess litigation proceeds available to other general unsecured creditors.

The company is seeking an April 28 hearing before the U.S. Bankruptcy Court for the District of Delaware.

Furniture Brands, a St. Louis-based designer, manufacturer and retailer of home furnishings, filed for bankruptcy on Sept. 9, 2013. The Chapter 11 case number is 13-12329.

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