United Retail files plan of liquidation following asset sale closing

By Caroline Salls

Pittsburgh, June 15 - United Retail Group, Inc. filed a plan of liquidation and related disclosure statement Thursday with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, the company closed on the sale of substantially all of its assets to Versa Capital Management, LLC affiliate Avenue Stores, LLC on April 13.

Purchase agreement consideration to be distributed to creditors includes up to $27 million for amounts outstanding under United Retail's debtor-in-possession facility, administrative claims and priority claims; up to $4.7 million for allowed 503(b)(9) claims; $1.5 million for the benefit of holders of allowed general unsecured claims; and up to $2 million for costs associated with winding down the debtors' estates.

Treatment of creditors will include:

• Holders of administrative claims, priority tax claims and other priority claims will be paid in full in cash;

• Holders of secured claims will either be paid in full in cash or receive the collateral securing the claims;

• Holders of general unsecured claims will receive their share of net available funds, which includes $2.75 million in unsecured claims funds plus any additional cash assets made available to the estates, minus any cash needed to fund reserves for higher priority claims; and

• Interests in United Retail Group, intercompany claims and intercompany interests will be canceled, and holders will receive no distribution.

The disclosure statement hearing is scheduled for July 19.

United Retail is a Rochelle Park, N.J., specialty retailer of large-size women's fashion apparel, footwear and accessories. The company filed for bankruptcy on Feb. 1. The Chapter 11 case number is 12-10405.

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