Gadzooks creditors object to disclosure statement

By Jeff Pines

Washington, Dec. 14 - Gadzooks Inc.'s official committee of creditors believes the company needs more disclosure, particularly a statement that the committee opposes Gadzooks' reorganization plan.

The committee filed its objection with the U.S. Bankruptcy Court for the Northern District of Texas Monday.

It noted that the Dallas-area based retailer "has substantially missed its November sales projections," which the company said would be a big money maker.

Gadzooks' plan estimates there will be $5 million to $8 million for the unsecured creditors, but the committee believes the amount will be at the bottom end because the company is missing its sales targets. The committee said the disclosure statement should say so. It wants Gadzooks to add best and worst scenarios for distributions with supporting documentation.

It also wants Gadzooks to provide more information on exit financing, which "appears in peril given the debtor's most recent operating results."

Gadzooks filed for bankruptcy on Feb. 3, 2004. Its Chapter 11 case number is 04-31486.

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