Hoop Holdings obtains court approval for disclosure statement; plan confirmation hearing Dec. 15

By Jennifer Lanning Drey

Portland, Ore., Nov. 5 - Hoop Holdings, LLC was granted court approval of the disclosure statement for its plan of reorganization from the U.S. Bankruptcy Court for the District of Delaware, according to a Wednesday filing.

The plan confirmation hearing is scheduled for Dec. 15.

As previously reported, the plan of reorganization provides for the estate assets of Hoop Holdings, its wholly owned retail subsidiary, and Canada Holdings to be placed in a liquidating trust, which will be overseen by a liquidating trustee.

Initially, the liquidating trustee will be Perry Mandarino, current chief restructuring officer.

According to the disclosure statement, Hoop sold its Disney Store North America business on April 30 for between $50 million and $55 million.

Creditor treatment

Creditor treatment under Hoop's plan of reorganization includes:

• Holders of between $19 million and $24 million of administrative claims will receive a full cash recovery;

• Holders of secured claims will, at the option of the liquidating trustee, have the full amount of their claim reinstated, receive a full cash recovery or receive the full amount of collateral securing the claim. The company said secured claims held by Wells Fargo Retail Financing have already been paid, and it estimated there are no additional holders of claims in this class.

• Holders of between $85 million and $91 million of general unsecured claims will receive their share of distributable cash after priority claims and convenience claims have been paid. The class is estimated to receive a 25% to 36% recovery.

Children's Place settlement

Hoop's plan of reorganization also provides for a settlement between Hoop and its parent company, The Children's Place.

Under the settlement, The Children's Place will pay Hoop $4 million that was paid to it under the Disney asset purchase agreement and a lease associated with the headquarters.

Additionally, The Children's Place will release all pre-bankruptcy claims and post-bankruptcy administrative claims against Hoop.

Hoop and its official committee of unsecured creditors will release all claims against The Children's Place.

The Children's Place has agreed to provide ongoing administrative services to Hoop for up to six months at no cost.

The bankruptcy court approved the settlement in April.

Hoop, a Secaucus, N.J., company that designs, contracts to manufacture and sells merchandise under the Disney Store brand name, filed for bankruptcy on March 26, 2008. Hoop's Chapter 11 case number is 08-10544.

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