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O'Sullivan, Creditors Agree on Reorganization Plan

By Home Furnishings Business in on February 2006 Ready-to-assemble furniture manufacturer O'Sullivan Industries Holdings Inc. has reached an agreement with a committee of unsecured creditors and controlling holders of secured notes due in 2008 on the company's plan for Chapter 11 reorganization.

Last Friday, the company also received approval for its amended disclosure statement from the U.S. Bankruptcy Court for the Northern District of Georgia. Later this week, copies of O'Sullivan's disclosure statement and reorganization plan, along with full details of the procedures for voting on the plan, are expected to be mailed to all parties entitled to a vote in the case.

O'Sullivan's plan incorporates a cash payment for general unsecured creditors and a potential additional settlement for all vendors and utility providers electing to participate, a warrant offering for senior subordinated notes due 2009, and the conversion of the secured notes into substantially all of the equity of the reorganized company and $10 million of new secured notes.

A confirmation hearing on the plan is scheduled for March 16.

"We are very pleased to have reached this consensual agreement on our plan of reorganization and the court's approval of our amended disclosure statement," said Rick Walters, O'Sullivan's interim CEO. "This is an important milestone in our Chapter 11 process and continues on our timeline to emerge from bankruptcy within the next few months."

Roswell, Ga.-based O'Sullivan has been in business since 1954 and had filed for Chapter 11 reorganization in October.


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