Handy Hardware disclosure statement approved; confirmation on July 25

By Jim Witters

Wilmington, Del., June 21 - Handy Hardware Wholesale, Inc. received approval of the disclosure statement for its second amended plan of reorganization, according to documents filed June 20 with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Handy Hardware plans to sell substantially all of its assets to an affiliate of Littlejohn Management Holdings, LLC.

The plan confirmation hearing is scheduled for 1 p.m. ET on July 25.

Creditor treatment

Treatment of creditors under the second amended plan includes:

• Administrative claims, priority non-tax claims and priority tax claims will be paid in full in cash from a Littlejohn contribution;

• The debtor-in-possession facility claim will be paid at the closing of the sale;

• Capital One will receive a Meridian facility via transfer of deeds, with Capital One also receiving title to 10 reach trucks, six stretch wrap machines and all furniture in the Meridian facility, as well as fixtures and racking in both facilities.

In addition, Capital One agreed to execute a lease with the buyer for the buyer's full use of the Houston facility.

If Capital One and the Littlejohn parties are unable to reach an agreement on the remaining terms for treatment of Capital One's secured claim, the failure may prevent a condition to occurrence of the plan effective date.

Capital One's secured claim is allowed in the amount of $25.8 million plus post-petition interest;

• Secured tax claims will be paid in full in cash;

• Holders of general unsecured claims will receive a share of cash equal to $4 million minus the amount necessary to pay non-tax priority claims in full and wind-down costs;

• Capital One will not have a general unsecured claim;

• Holders of Section 510(b) claims will receive no distribution; and

• All equity interests will be canceled, and members will receive no distribution.

Handy Hardware, a hardware retailer co-operative based in Houston, filed for bankruptcy on Jan. 11, 2013. Its Chapter 11 case number is 13-10060.

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