Lucky’s Market disclosure statement approved; plan hearing Dec. 23

By Sarah Lizee

Olympia, Wash., Nov. 24 – Lucky’s Market received approval of the disclosure statement for its Chapter 11 joint plan of liquidation on Tuesday in the U.S. Bankruptcy Court for the District of Delaware.

A hearing on confirmation of the plan is slated for Dec. 23.

Under the plan, holders of PACA claims, PASA claims, professional fee claims, priority tax claims and administrative claims will be paid in full from a wind-down reserve.

To the extent not resolved prior to the effective date, the debtors will maintain a claims reserve for the disputed class action claims in the amount of $250,000, pending final resolution of those claims.

Any asset of the estates that is not cash on hand, an identified asset or equity interest in Lucky’s Market GP 2, LLC and LFM Stores, LLC will be transferred to the pre-petition secured lenders on account of their allowed pre-petition secured claims, provided that each pre-petition secured lender at its discretion may elect not to have those remaining assets transferred to it and instead elect to have the liquidating debtor administer the remaining asset with any proceeds being paid promptly to the pre-petition secured lender under the terms of a settlement. Any remaining asset administered by the liquidating debtor and not previously disposed of will be transferred to a liquidating trust, and the holder will receive a liquidating trust interest entitling it to continuing distributions.

Holders of other secured claims will receive the collateral securing their claims.

Holders of priority claims will receive payment in full in cash.

Holders of general unsecured class A claims will receive their pro rata share of the general unsecured claims class A recovery pool allocation.

Holders of general unsecured class B claims will receive their pro rata share of the general unsecured claims class B recovery pool allocation.

The pre-petition secured lender will receive the general unsecured claims class C recovery pool allocation.

Intercompany claims and equity interests will be cancelled with no distribution.

To the extent that EB-5 investors vote to accept the plan, each holder will receive his or her pro rata share of the equity interest in the EB-5 designated entity.

The debtors are seeking a Dec. 23 plan confirmation hearing.

Lucky’s is a Niwot, Colo.-based supermarket operator. The company filed bankruptcy on Jan. 27, 2020 under Chapter 11 case number 20-10166.

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