Heilig-Meyers files amended plan of reorganization

By Ellen Chang

Houston, March 8 - Heilig-Meyers Co.'s bondholders will receive a 100% recovery under the amended plan of reorganization and disclosure statement filed by the company Monday.

The amended plan and restated joint liquidating plan of reorganization proposed by the company and the unsecured creditors committee includes Heilig -Meyers Furniture Co., Heilig -Meyers Furniture Co. West, Inc., HMY Star, Inc. and MacSaver Financial Services, Inc.

Heilig-Meyers' subsidiary, RoomStore, has filed a separate plan of reorganization, to maximize its value. RoomStore is not liquidating and is expected to emerge from Chapter 11 as a retailer.

The treatment of Heilig-Meyers' claims is the following:

* The Wachovia secured claims in class 2 will receive 100% recovery in cash;

* The Prudential note secured claims in class 2 will receive 100% recovery in cash;

* The synthetic leases secured claims in class 2 will receive 100% in cash;

* The bondholders with secured claims in class 3 will receive 100% through rights in the collateral proceeds received by the pre-bankruptcy lenders;

* The other secured claims in class 4 will of an estimated value up to $1 million will receive 100% recovery in cash;

* The $527.5 million of funded debt unsecured claims will receive 7.2% recovery in the form of an interest in the trust that will distribute liquidated assets;

* The $500 million of Heilig unsecured claims will receive a 5.2% recovery in the form of liquidation trust interests;

* Holders of unsubordinated claims and old common stock will not receive anything.

Heilig-Meyers is a Richmond, Va.-based home furnishing retailer. It filed for bankruptcy on Aug. 16, 2000 with the U.S. Bankruptcy Court for the Eastern District of Virginia. Its Chapter 11 case number is 00-34533.

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