BARNEYS CH. 11 VENDORS FIND MORE TO FEAR
Byline: Rich Wilner
NEW YORK — Barneys vendors are concerned they will have little or no voice in the Chapter 11 reorganization of the upscale retailer, and that the inferior position will lead to a smaller payout.
The U.S. Trustee is expected to choose an unsecured creditors’ committee today. According to court papers, of Barneys’ largest 25 unsecured creditors, institutions hold $283.1 million in claims while the trade is owed just $6.5 million.
Barneys has already said in court papers that it will treat unsecured institutional creditors differently than unsecured trade creditors. That difference has attorneys representing vendors worried.
“Institutions and trade creditors often have different goals when voting on creditors’ committees, and with institutions owed much more than the trade, there is the possibility that institutions, the banks and insurance companies, will be able to stick it to the trade,” said one creditors’ attorney Friday.
The attorney, who asked not to be identified, said despite the Trustee’s tradition of going with just one committee, the Barneys’ case was unique enough to appoint two committees.
“With Barneys already having filed a plan saying it will treat the trade differently than institutions, the Trustee should take steps to protect the interests of the trade,” the attorney added.
In its plan of reorganization, Barneys said banks and insurance companies will be paid 100 cents on the dollar in Series A Barneys Notes while the trade is being offered 100 cents on the dollar in Series B Barneys Notes.