Rhodes general unsecured, convenience claimants vote to accept plan; Heilig-Meyers votes to reject

By Caroline Salls

Pittsburgh, Jan. 31 - Rhodes, Inc.'s plan of reorganization was accepted by holders of its general unsecured and unsecured convenience class claims, but rejected by Heilig-Meyers, the one holder of $68.12 million Rhodes Holdings II unsecured claims, according to a Monday filing with the U.S. Bankruptcy Court for the Northern District of Georgia.

According to the filing, 157 or 92.9% of holders of $18.07 million or 99.43% of general unsecured claims voted to accept the plan, while 12 or 7.10% of holders of $104,372 or 0.57% of the claims voted to reject it.

Also, 73 or 92.41% of holders of $15,562 or 94.55% of convenience unsecured claims voted to accept the plan, while six or 7.59% of holders of $898 or 5.45% of that class voted to reject it.

On Dec. 30, the court approved a request by Heilig-Meyers to order Rhodes to submit to an examination under bankruptcy law amid allegations of breaches of fiduciary duty and conspiracy by Rhodes' directors and officers.

In its motion, Heilig-Meyers said it believes that it, as the only creditor of Rhodes Holdings II, has significant claims against some directors and officers of Rhodes and/or Rhodes Holdings II based on alleged breaches of fiduciary duty and conspiracy by the directors and officers in conjunction with a third party or third parties.

Rhodes, an Atlanta-based furniture retailer, filed for bankruptcy on Nov. 4, 2004. Its Chapter 11 case number is 04-78434.

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