HMY Roomstore emerges from Chapter 11 as RoomStore Inc.

By Caroline Salls

Pittsburgh, June 7 - RoomStore Inc., formerly HMY Roomstore Inc., emerged from Chapter 11 bankruptcy protection on Tuesday, according to a company news release.

Under the terms of the company's plan of reorganization, the existing equity interests in RoomStore have been cancelled and the unsecured creditors of RoomStore will receive new common stock in satisfaction of their claims.

Heilig-Meyers Co., the former parent of HMY Roomstore, is the single largest creditor of RoomStore and will receive about 67% of the new common stock.

The plan also includes a $35 million working capital facility with Bank of America NA, which closed on June 1.

The facility will be a $35 million five-year revolving credit facility, but the company will have the option to start with a $30 million facility and subsequently increase it to $35 million. Letters of credit will be limited to $15 million.

Interest will be at Libor plus 150 basis points, and there will be a 25 basis point unused line fee.

The facility will be used for general corporate purposes.

On the effective date of the plan, a new board of directors was installed consisting of president and chief executive officer Curtis C. Kimbrell III and four independent directors, including furniture industry veterans Robert Shaffner and Ronald A. Kaplan. The remaining two directors are Eugene I. Davis and N. Martin Stringer.

RoomStore is a Richmond, Va.-based home furnishing retailer that emerged as the surviving company from Heilig-Meyers Co.'s Chapter 11 case. Heilig-Meyers will be liquidated.

Heilig-Meyers 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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