Heritage Home trustee seeks OK of settlement with Furniture Brands

By Sarah Lizee

Olympia, Wash., June 16 – Heritage Home Group LLC’s Chapter 7 trustee, Alfred T. Giuliano, is seeking court approval of a settlement between himself on behalf of the debtors’ estates, and the liquidating trustee of FBI Wind Down, Inc. liquidating trust, according to a motion filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

FBI Wind Down, which was formerly known as Furniture Brands International, Inc., had filed Chapter 11 bankruptcy on Sept. 9, 2013.

The Heritage Home Group debtors were entities newly formed in November 2013 for the purpose of acquiring the assets of FBI Wind Down. The sale closed on Nov. 25, 2013.

Immediately after the sale, disputes arose between Heritage Home Group and the FBI Wind Down debtors relating to the purchase price of the assets.

The FBI debtors’ Chapter 11 plan was later confirmed, and the debtors emerged from bankruptcy on Aug. 1, 2014.

On Nov. 20, 2015, the liquidating trustee for the FBI Wind Down debtors filed adversary proceedings against Heritage Home Group seeking to recover over $14 million in damages. The proceeding is pending.

Following Heritage Home Group’s bankruptcy petition in January 2019, the FBI debtors’ trust filed five proofs of claim amounting to $14 million against each of the Heritage Home Group debtors.

Giuliano said he and the liquidating trustee for FBI Wind Down engaged in negotiations and agreed to resolve all disputes between the respective estates, including the adversary proceeding and the FBI Wind Down claims.

Under the settlement, the FBI Wind Down claims will be allowed as wholly pre-petition general unsecured, non-priority claims against each of the Heritage Home Group debtors in the reduced amount of $8.5 million each.

The parties will also exchange mutual releases under the settlement.

A hearing is scheduled for July 21.

High Point, N.C.-based Heritage Home Group is a home furnishings manufacturer and retailer. The company filed bankruptcy on July 29, 2018 under Chapter 11 case number 18-11736.

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