Heilig out of court
At long last, bankruptcy plan a go
By Clint Engel -- Furniture Today, March 5, 2006
Richmond, Va. — Heilig-Meyers, long gone as a retail entity, is now out of bankruptcy court too.
The reorganization plan for what was once the nation's No. 1 home furnishings store took effect last month, with the remaining assets of the former retailer now controlled by a liquidation trust led by trustee Anthony Schnelling, founding member and managing director of turnaround, crisis and interim management specialist Bridge Associates LLC of New York.
The trust sets aside between $10.8 million and $15.6 million for payment to creditors holding priority and administrative claims, including certain vendors who shipped Heilig-Meyers shortly before its August 2000 Chapter 11 bankruptcy filing, as well as taxing authorities and former Heilig employees.
It remains unclear how much money creditors will receive. Holders of Heilig-Meyers common stock will receive nothing.
The trust's primary asset is a 67% stake in a former Heilig division, The RoomStore, which Heilig received when The RoomStore emerged separately from its parent's bankruptcy proceedings in June 2005. According to a story in the Richmond (Va.) Times-Dispatch, that stake was valued at about $45 million when RoomStore emerged.
Just what the trustee would do with that stock — distribute it to Heilig creditors, sell it or hold it — was not disclosed in the press release announcing the reorganization plan has taken effect.
Dave Garlock, of Bridge Associates, said his firm only recently was named trustee and has not yet determined what it will do. "We're still very early in the process," he said.
The reorganization plan was amended three times. Heilig-Meyers was based in Richmond, as is The RoomStore.
Before Heilig-Meyers filed for bankruptcy, it had reported total revenues of nearly $2.3 billion in the year ended Feb. 29, 2000, and furniture, bedding and accessory sales of almost $1.7 billion. It lost $58.6 million that year and subsequently sold off or closed all but The RoomStore chain.
Following a buying spree of furniture and bedding chains throughout much of the 1990s, the retailer's size peaked the year before, with 1,249 stores, total revenues of $2.7 billion and furniture, bedding and accessory sales of nearly $2.1 billion.
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Heilig out of court
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