United Retail: Bankruptcy court denies OK of disclosure statement

By Lisa Kerner

Charlotte, N.C., July 20 - United Retail Group, Inc.'s disclosure statement was not approved by the court, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The Class 2 allowed secured claims were incorrectly described as unimpaired and not entitled to vote. Because the error persists in the current version, or there is insufficient disclosure to explain why the plan is not wrong, the disclosure statement could not be approved, the filing said.

As previously reported, United Retail filed its plan of liquidation and related disclosure statement in June and the company closed on the sale of substantially all of its assets to Versa Capital Management, LLC affiliate Avenue Stores, LLC in April.

Under the purchase agreement, the amount 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.

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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