Enesco files liquidation plan

By Caroline Salls

Pittsburgh, June 13 - Enesco Group, Inc. filed a plan of liquidation and related disclosure statement Wednesday with the U.S. Bankruptcy Court for the Northern District of Illinois.

According to the disclosure statement, creditor distributions will be funded primarily from cash on hand, proceeds from a lender settlement, proceeds and tax refunds from the resolution of a Hong Kong tax dispute and litigation trust proceeds.

If the plan is not confirmed or the company's Chapter 11 case is converted to Chapter 7 for liquidation, Enesco said these proceeds will most likely be lost.

The company said it will also liquidate its remaining assets and distribute those proceeds to creditors.

Treatment of creditors under the plan will include:

• Holders of priority tax claims, not including an Internal Revenue Service claim, and non-priority tax claims will receive payment in full in cash;

• The IRS will receive at least $800,000 from a pre-bankruptcy lender settlement, 52.5% of net contingency litigation proceeds, other cash that comes into the estate and 50% of any funds earmarked for but not used for payment of administrative claims and non-IRS priority claims, until the IRS claim is paid in full;

• Holders of pre-bankruptcy lender claims have already received cash in satisfaction of their claims;

• Holders of other secured claims will receive either the collateral securing their claim or the proceeds from the liquidation of the collateral securing the claim, for at least a 30% recovery;

• Holders of $1.6 million in unsecured claims will have two treatment options.

Under the first option, creditors will receive a share of the pre-bankruptcy lender settlement fund, 35% of the net contingency litigation proceeds and half of any funds not used for administrative or non-IRS priority claims.

Under the second option, these creditors will receive a share of litigation trust proceeds, plus 35% of the net contingency litigation proceeds and half of any funds not used for administrative or non-IRS priority claims; and

• Holders of $120,000 in untimely filed and other subordinated claims, as well as interest holders, are unlikely to receive any distribution under the plan. However, these creditors will receive cash if any is left over after payment of all other claims.

Enesco is an Itasca, Ill., producer of fine gifts, collectibles and home decor accessories. It filed for bankruptcy on Jan. 12. Its Chapter 11 case number is 07-00565.

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