Wachovia Bank stay request on HMY Roomstore plan confirmation denied

By Caroline Salls

Pittsburgh, June 1 - Wachovia Bank NA's request for a stay of the confirmation order of HMY Roomstore Inc.'s plan of reorganization was denied, according to a Wednesday filing with the U.S. Bankruptcy Court for the Eastern District of Virginia.

Wachovia Bank, the collateral agent for HMY Roomstore's pre-bankruptcy secured lenders, requested the stay pending appeal.

In his order denying the stay, judge Douglas O. Tice Jr. said "the court finds that Wachovia has failed to demonstrate that it will suffer irreparable injury should the stay be denied."

Tice said HMY Roomstore and its creditors, not Wachovia, are more likely to "suffer irreparable harm if the stay is entered" by negatively impacting ongoing operations.

Also, Tice said Wachovia has not demonstrated the likelihood of success in its appeal because its arguments lack merit.

Wachovia appealed the confirmed plan because the bank said it caps the lenders' secured claim at $128.5 million, in turn eliminating the lenders' replacement liens and super-priority claims against Roomstore.

HMY Roomstore is a Richmond, Va.-based home furnishing retailer that will emerge as the surviving company from Heilig-Meyers Co.'s Chapter 11 case. Heilig-Meyers will be liquidated.

Heilig-Meyers filed for bankruptcy on Aug. 16, 2000 with the U.S. Bankruptcy Court for the Eastern District of Virginia. Its Chapter 11 case number is 00-34533. HMY Roomstore's case number is 00-34536.

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