HENDERSON, N.C.--Rose's Stores Inc. has filed a Chapter 11 plan of reorganization that will give trade and other unsecured creditors 100 percent ownership of the 113-store discounter.
With total unsecured claims--mainly trade claims--totaling roughly $130 million, and Rose's net worth estimated to be between $60 million and $90 million, the common stock payout to unsecured creditors is valued between 45 cents and 70 cents on the dollar.
Although creditors must vote on the plan by early October, the plan won't become effective until after the Jan. 28, 1995, close of Rose's fiscal year. This will allow the trade ample time to review the retailer's performance through the crucial holiday retail period.
Rose's, which said the plan has the support of its "significant" secured creditors and its unsecured creditors, also reported that it signed a three-year, $80 million exit financing deal with General Electric Capital Corp.
The company expects the plan to be confirmed by November, and that it will emerge from Chapter 11 by April 30, 1995.
The chain filed for Chapter 11 protection on Sept. 5, 1993. At the time, it had 215 stores.
Secured creditors, primarily secured note holders, will receive $78 million in cash plus four-year notes to pay off the remaining $30 million in debt.
Existing stockholders will receive warrants for the purchase of up to 30 percent of the reorganized company's stock, on a fully diluted basis.
--Fairchild News Service

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