Heilig-Meyers files third amended liquidation plan; priority and secured claimants to share trust

By Caroline Salls

Pittsburgh, Dec. 8 - Heilig-Meyers Co. and its official committee of unsecured creditors filed a third amended and restated joint liquidating plan of reorganization Wednesday with the U.S. Bankruptcy Court for the Eastern District of Virginia that provides details on funding for the liquidation trust and payment to creditors.

The plan calls for the creation of a liquidation trust to liquidate and make distributions of assets and to administer the resolution of the outstanding claims against the company. The trust will have a term of three years.

According to the plan, all cash necessary for the liquidation trustee to make payments and establish the reserves required under the plan will be obtained from existing cash balances on the effective date, a contingent funding commitment and proceeds from estate actions.

Distribution from the liquidation trust will be made to holders of priority claims and other secured claims.

Holders of funded debt unsecured claims and Heilig unsecured claims will receive their share of trust interests.

Holders of pre-bankruptcy lender claims and subordinated claims, including holders of common stock, will receive no distribution under the plan.

HMY Roomstore was a former subsidiary of Heilig-Meyers. Heilig-Meyers is the single largest creditor of reorganized RoomStore.

RoomStore emerged from Chapter 11 in June as the surviving company from Heilig-Meyers' Chapter 11 case.

Heilig-Meyers filed for bankruptcy Aug. 16, 2000. Its Chapter 11 case number is 00-34533.

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