Goody’s Family Clothing Inc. has filed a disclosure statement and reorganization plan with the Delaware bankruptcy court, but unsecured creditors aren’t likely to collect much on their claims.
This story first appeared in the July 29, 2008 issue of WWD. Subscribe Today.
The disclosure statement provides for them to get, on a prorated basis, “unsecured creditors cash and unsecured creditors notes,” the value of which was unspecified in the document. Sources familiar with the plan said that, although the hope is to have something left for unsecured creditors after other disbursements are made, it is likely that they will end up with a return of zero cents on the dollar.
The retailer of moderate-priced family apparel, which filed for Chapter 11 on June 9, said a court hearing is set for Aug. 25. Should it get approval for the disclosure statement and reorganization plan, Goody’s can then begin the process of soliciting approval from creditors so it can obtain court confirmation of the plan.
The current plan, if approved, will effect a compromise and settlement among the debtors and their pre-petition lenders. The retailer will be reorganized, and will continue operations.
Paul White, Goody’s chief executive officer, said, “We appreciate the support of our vendor community, customers and employees during this Chapter 11 process.”
Goody’s, with headquarters in Knoxville, Tenn., operates 286 stores in 20 states.