Goody's Family Clothing disclosure statement approved; plan confirmation hearing Oct. 6

By Caroline Salls

Pittsburgh, Aug. 25 - Goody's Family Clothing, Inc.'s disclosure statement for its plan of reorganization was approved Monday by the U.S. Bankruptcy Court for the District of Delaware.

The plan confirmation hearing is scheduled for Oct. 6.

Goody's said the plan is based on a settlement with its pre-bankruptcy junior lenders and its official committee of unsecured creditors.

Creditor treatment will include:

• Holders of pre-bankruptcy senior lender claims and non-tax priority claims will recover 100% in cash;

• Holders of secured tax claims and miscellaneous secured claims will recover 100% either through payment in cash or return of the collateral securing the claim;

• Holders of Aviation Finance Group secured claims will receive the collateral securing their claims;

• Holders of $67.53 million in Prentice term loan agreement claims will receive a share of new common stock in the reorganized company in satisfaction of $52.53 million of the loan and a new Prentice exit note;

• Holders of $31.8 million in tranche B term loan agreement claims will receive either their share of new common stock or treatment as general unsecured creditors, to be based on an equity election. However, PGDYS Lending will receive its share of new common stock because it has elected to waive its right to be treated as a general unsecured creditor;

• Holders of general unsecured claims will receive their share of general unsecured creditor cash and general unsecured preferred stock;

• Holders of old equity interests, convenience claims, subordinated 510(b) claims and subordinated 510(c) claims will receive no distribution under the plan; and

• Holders of intercompany claims will either have their claims reinstated or will receive no distribution;

Goody's, a Knoxville, Tenn., family apparel retailer operating in small- to mid-size markets primarily in the Southeast, filed for bankruptcy on June 9. Its Chapter 11 case number is 08-11133.

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