Tuesday Morning, claim purchaser group reach settlement agreement

By Sarah Lizee

Olympia, Wash., Dec. 14 – Tuesday Morning Corp. is seeking court approval of a settlement with an ad hoc claim purchaser group, according to an emergency motion filed Monday in the U.S. Bankruptcy Court for the Northern District of Texas.

Under the settlement agreement, the claim purchaser group members will withdraw their plan objection and vote to accept the plan.

The claim purchaser group also agreed to issue a press release related to the settlement, and late Friday, it announced that the parties had reached the consensual agreement. The group said it will vote in favor of the plan, and said it believes it is also in the best interest of general unsecured creditors to support the plan.

As previously reported, Tuesday Morning filed a motion on Dec. 7 seeking enforcement of the order approving the disclosure statement for its Chapter 11 plan, saying that the claim purchasers had undermined the solicitation process.

“In blatant disregard of the disclosure statement order and this court’s rulings at the disclosure statement hearing, an ad hoc group of investment funds (collectively, the claim purchase group) that purchased trade claims engaged in self-help and published false and misleading materials advising unsecured creditors vote to reject the plan,” the company said.

“The claim purchaser group actively sought to disseminate false and misleading statements to creditors to solicit votes for rejection of the plan through the creation of the website, the dissemination of the press release, and the implementation of automated communications with creditors via e-mail and telephone.

“Through these actions, the claim purchaser group has deliberately undermined the entire solicitation process authorized by this court.”

On Wednesday, the court ordered the claim purchaser group to take the website down until the false statements were removed.

Tuesday Morning is a discount off-price retailer based in Dallas. The company filed bankruptcy on May 27, 2020 under Chapter 11 case number 20-31476.

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