Hancock Fabrics disclosure statement approved; plan hearing June 12

By Caroline Salls

Pittsburgh, May 5 – Hancock Fabrics, Inc. received court approval of the disclosure statement for its second amended plan of liquidation, according to an order filed Friday with the U.S. Bankruptcy Court for the District of Delaware.

The plan confirmation hearing is scheduled for June 12.

Under the proposed plan, administrative claims, priority tax claims and other priority claims will be paid in full in cash.

Holders of Wells Fargo pre-bankruptcy claims, GACP pre-bankruptcy claims and noteholder pre-bankruptcy claims will receive cash equal to the amount of the claim, as well as treatment provided in Hancock’s debtor-in-possession financing agreement and order and cash collateral order.

Holders of other secured claims will receive one or a combination of cash equal to the claim amount, the collateral securing the claim or proceeds from the sale of the collateral.

Holders of general unsecured claims will receive a share of available assets after payment or reserve for senior claims and for the costs associated with the administration and liquidation of the Hancock estates.

Holders of interests and securities subordinated claims will receive nothing, and the company’s existing stock and interests will be cancelled.

Based in Baldwyn, Miss., Hancock is a specialty retailer of fabric and related home sewing and decorative accessories. The company filed for bankruptcy on Feb. 2, 2016 under Chapter 11 case number 16-10296.

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