Heilig-Meyers

Client

Heilig-Meyers Company was a national furniture retailer operating 872 stores which generated $2.0 billion in revenues prior to filing bankruptcy in 2001.

Challenge

The Trust had approximately $950 million in claims for which claim reconciliation had to be completed for over 9200 claimants. The Trust assets included 70% holding of RoomStore common stock (a former division of Heilig-Meyers that emerged from the bankruptcy). A Bridge Managing Director was retained as Liquidating Trustee to complete the claim reconciliation process, recover collateralized receivables and cash collateral, monetize or distribute the RoomStore stock, litigate tax disputes and make distributions to Priority and Unsecured creditors.

Solution

Bridge took over the claims agent function and resolved outstanding claims. The Trust undertook a sales process to monetize the RoomStore common stock that has resulted in the pending registration and distribution of RoomStore common stock to the creditors. The tax refund dispute was settled. The Trust also completed all tax filings required of the Debtor.

Results

The Trust resolved the claims against the cash collateral contributing $14 million to the assets to be distributed and has collected $4 million in other receivables. Distributions were completed to all priority claimants. The unsecured claims have been settled. First round of distributions to creditors has been completed and final distributions including the RoomStore stock is pending.