Merit Group files liquidation plan to distribute asset sale proceeds

By Caroline Salls

Pittsburgh, July 18 - Merit Group, Inc. filed its plan of liquidation and related disclosure statement on Saturday with the U.S. Bankruptcy Court for the District of South Carolina.

Under the plan, a liquidating supervisor will be appointed to administer the assets remaining after the sale of substantially all of Merit's assets is complete, as well as to make plan distributions and wind up the company's estates and Chapter 11 case.

Treatment of creditors will include:

• Holders of administrative claims, non-tax priority claims and priority tax claims will be paid in full in cash;

• To the extent that Regions Bank's and Stonehenge's secured claims have been paid in full during the Chapter 11 case, Regions Bank and Stonehenge will not receive any distribution under the plan, but will retain their liens on the net sale proceeds until the claims are paid in full in cash with interest;

• Holders of governmental unit real and ad valorem tax secured claims and other secured claims will have their liens attached to the net sale proceeds and be paid the lien amount in cash plus post-confirmation interest;

• Holders of convenience claims will be paid the amount of their claim in cash, up to $300;

• Holders of unsecured claims will receive a share of net distributable proceeds after all administrative, priority and secured claims are paid in full;

• Subordinated claims would be paid only after all other claims were paid in full, and the company said it does not expect to have any funds available to pay subordinated claims; and

• Interest holders will receive no distribution.

Merit, a Spartanburg, S.C., paint sundry distributor, filed for bankruptcy on May 17. The Chapter 11 case number is 11-03216.

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