Former Loehmann’s Holdings secures confirmation of plan of liquidation

By Caroline Salls

Pittsburgh, July 22 – The liquidation plan for LHI Liquidation Co. Inc., formerly Loehmann’s Holdings Inc., was confirmed July 22 by the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, the proposed plan calls for the transfer of specified assets and funds to a litigation trust and all of the company’s other remaining assets to a disbursing agent on the plan effective date.

The litigation trust assets will be liquidated by the trust.

Treatment of creditors will include the following:

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

• Miscellaneous secured claims will either be paid in full in cash or the collateral securing the claim will be returned;

• Pre-bankruptcy first-priority credit facility claims were paid in full during the Chapter 11 proceedings. As a result, these creditors will receive no further distribution under the plan;

• Holders of post-bankruptcy second-priority credit agreement claims will receive a share of pre-bankruptcy second-priority lender cash and litigation trust interests;

• Holders of pre-bankruptcy third-priority credit agreement claims, equity interests and intercompany claims will receive no distribution; and

• Holders of general unsecured claims will receive a share of general unsecured claims cash, minus any fees and expenses of capped creditors committee professional fees and expenses, as well as general unsecured creditor litigation trust interests.

Loehmann’s, a Melville, N.Y.-based retailer of women’s clothing, filed for bankruptcy on Dec. 15. The Chapter 11 case number is 13-14050.

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