From Home Furnishing Business
Furniture Brands Gets OK to Solicit Bankruptcy Creditors
A bankruptcy judge has given the go ahead to Furniture Brands International's estate to solicit creditors of a Chapter 11 plan that promises a higher recovery for unsecured claims from a settlement with the Pension Benefit Guaranty Corp.
U.S. Bankruptcy Judge Christopher Sontchi gave the disclosure statement the green light after hearing it had the support of the unsecured creditors' committee. Furniture Brands has also resolved an objection from a lead plaintiff seeking a securities class action against Furniture Brands in Missouri.
The judge's ruling allows Furniture Brands to solicit creditors of the Chapter 11 plan that will distribute proceeds from the $280 million sale of the company's assets to KPS Capital Partners, which has since named the new company Heritage Home Group.
The order also set July 14 as the date for a confirmation hearing for the plan.
Members of the class action, who have alleged in court filings that Furniture Brands' executives had made false and misleading statements about financial results, had argued against the disclosures saying they didn't inform creditors of the impact the litigation could have on the pension plan.
In court yesterday, attorneys for Furniture Brands said the disclosure statement was revised to include information about the litigation. The plaintiff's lead attorney reserved the right to argue with the Chapter 11 plan.