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Musicland unsecured creditors to share in transferred action proceeds
By Caroline Salls
Pittsburgh, Sept. 15 - Musicland Holding Corp. filed the disclosure statement for its first amended plan of liquidation Friday with the U.S. Bankruptcy Court for the Southern District of New York, which amends the distribution to general unsecured creditors.
Under the original plan, general unsecured creditors were not expected to receive any distribution. Under the first amended plan, however, these creditors will receive a share of the net proceeds of unsecured transferred actions.
Following emergence from bankruptcy, the company will continue to exist only to liquidate and wind up its estates.
Under the plan, holders of administrative, Wachovia obligations, other priority and other secured claims will receive full recovery in cash.
Holders of $170.1 million in secured trade claims will receive a share of secured creditor assets, net proceeds from unsecured transferred actions and a secured creditor release.
Under the original plan, these creditors were slated to receive their share of available and remaining assets and their share of a secured trade creditor release after payment of administrative expense, disputed administrative expense, other priority, other secured and priority tax claims.
Secured trade creditors include Buena Vista Home Entertainment, Inc.; EMI Music North America; Metro-Goldwyn-Mayer Home Entertainment LLC; Paramount Pictures, Home Video Division; Sony BMG Music Distribution; Sony Pictures Home Entertainment Inc.; Twentieth Century Fox Home Entertainment LLC; Universal Music and Video Distribution; Warner/Elektra/Atlantic Corp. and Warner Home Video Inc.
Existing stock and interests will be canceled, and holders will receive no distribution under the plan.
Musicland, a Minnetonka, Minn., specialty retailer of pre-recorded entertainment software products, filed for bankruptcy on Jan. 12, 2006. Its Chapter 11 case number is 06-10064.
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