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Levitz Home Furnishings asks for court approval to distribute trust funds, dismiss Chapter 11 case
By Jennifer Lanning Drey
Portland, Ore., Sept. 28 - Levitz Home Furnishings, Inc. and its official committee of unsecured creditors requested court approval to distribute the funds held in its general unsecured creditors trust fund and to dismiss the company's Chapter 11 case, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.
The company wants to distribute $580,000 of funds held in the trust for general unsecured creditors to holders of allowed unsecured claims.
Additionally, Levitz told the court that its Chapter 11 bankruptcy case should be dismissed because "it is simply not possible or practical to effectuate a plan of reorganization," as the company has already liquidated its assets and has no funds available to pay administrative expenses that might accrue.
Levitz sold substantially all of its assets to PLVTZ, LLC in December 2005 and has since ceased retail operations and is in the process of winding down its affairs, according to the motion.
As part of the 2005 sale, PLVTZ agreed to carve out certain funds that it otherwise would have been entitled to receive. The funds have been held in the general unsecured creditors trust.
In the Friday filing, Levitz asked the court to appoint Walker Truesdell as trustee of its general unsecured creditors trust fund and to authorize Truesdell to use up to $70,000 from the fund to pay reasonable expenses associated with the claims resolution process and the distribution.
Levitz estimates that the unsecured claims against the company total approximately $250 million. Based on the amount in the fund, Levitz estimates making a pro rata distribution of about 0.3% to unsecured creditors.
Levitz, a Woodbury, N.Y., furniture retailer, filed for bankruptcy on Oct. 11, 2005. Its Chapter 11 case number is 05-45189.
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