Lucky’s Market Chapter 11 liquidation plan effective as of Dec. 31

By Sarah Lizee

Olympia, Wash., Dec. 31 – Lucky’s Market’s Chapter 11 joint plan of liquidation took effect on Thursday, according to a notice filed with the U.S. Bankruptcy Court for the District of Delaware.

The plan was confirmed on Dec. 23, as previously reported.

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

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 due to 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 have the liquidating debtor administer the remaining asset with any proceeds 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.

Pre-petition secured lenders will receive the general unsecured claims class C recovery pool allocation.

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

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

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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