Ultimate Electronics' reorganization plan confirmed; consolidated company to be formed for liquidation

By Caroline Salls

Pittsburgh, Dec. 9 - Ultimate Electronics Inc.'s plan of reorganization was confirmed Friday by the U.S. Bankruptcy Court for the District of Delaware.

The plan establishes a consolidated company for liquidation and gives unsecured creditors 1.5% to 5% recovery.

After the plan takes effect, the company will continue to exist as Liquidating Ultimate solely to distribute all of the assets of the company's estates.

The plan administrator will be the sole officer and sole director of Liquidating Ultimate.

The plan calls for substantive consolidation of all debtors into Ultimate.

Under the plan, holders of $83 million in general unsecured claims will recover 1.5% to 5% in their share of the class four distribution, which will be funded by the proceeds from the sale of the company's Thornton, Colo., property, its $3.5 million junior subordinated promissory note issued April 20, 2005, proceeds from causes of action and available cash.

Holders of $0.3 million in debtor-in-possession claims will receive 100% recovery in cash.

Holders of old equity interests will receive no distribution under the plan.

Ultimate Electronics, a Thornton, Colo.-based consumer electronics retailer, filed for bankruptcy on Jan. 11, 2005. Its Chapter 11 case number is 05-10104.

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