Home Interiors & Gifts' disclosure statement granted court approval

By Lisa Kerner

Charlotte, N.C., March 30 - Home Interiors & Gifts, Inc.'s disclosure statement was approved, according to a filing with the U.S. Bankruptcy Court for the Northern District of Texas.

A plan confirmation hearing is scheduled for May 26.

As previously reported, the company filed its plan of liquidation and related disclosure statement in February.

A creditor trust will be established under the plan, and the company's remaining assets and causes of action will be transferred to the trust on the plan effective date.

Treatment of creditors will include:

• Group One lenders will retain their liens on all remaining collateral securing their claims, and the creditor trust trustee will pay 79.92% of the proceeds from the collection of any collateral to the lender agent;

• Group Two lenders, or non-Highland lenders, will continue to receive any proceeds from the liquidation of collateral;

• Holders of Group Two lender deficiency claims will share the general unsecured claim distribution after general unsecured creditors have received $3.5 million;

• General unsecured creditors will share in class 5 cause of action proceeds; and

• The rights of equity interest holders will be extinguished.

Home Interiors & Gifts is a Dallas-based integrated manufacturer and distributor of home decorative accessories. The company filed for bankruptcy on April 29, 2008. Its Chapter 11 case number is 08-31961.

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