Former Orchard Supply files liquidation plan, disclosure statement

By Jim Witters

Wilmington, Del., Oct. 10 - OSH 1 Liquidating Corp., formerly Orchard Supply Hardware Stores Corp., filed its proposed Chapter 11 plan of liquidation and disclosure statement on Oct. 9 with the U.S. Bankruptcy Court for the District of Delaware.

The plan was made possible by a settlement reached with its official committee of unsecured creditors and senior secured term lenders that the court approved in September.

As previously reported, Orchard Supply completed the sale of 72 Orchard stores to Lowes Cos., Inc. for about $205 million in cash plus the assumption of payables owed to nearly all of Orchard's supplier partners. That sale closed on Aug. 30.

Treatment of creditors

Under the proposed liquidation plan:

• Holders of allowed administrative claims, allowed priority tax claims and allowed other priority claims will be paid in full in cash without interest;

• Holders of allowed senior secured term loan claims will receive a proportional share of any assets remaining after payment of other allowed secure claims, payment to the general unsecured creditors trust and funding of required reserves;

• Holders of allowed other secured claims will either receive payment in full in cash or the collateral securing the claim;

• Holders of allowed general unsecured claims will receive a proportional share of the funds in the general unsecured claims trust; and

• Holders of equity interests will receive no distribution.

A hearing for approval of the disclosure statement is scheduled for 1 p.m. ET on Nov. 13.

Orchard Supply, a San Jose, Calif.-based hardware retailer, filed for bankruptcy on June 17. Its Chapter 11 case number is 13-11565.

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