London Fog files liquidating plan; unsecured creditors slated to recover 15% to 27%

By Caroline Salls

Pittsburgh, Sept. 21 - London Fog Group, Inc. filed a liquidating plan of reorganization and related disclosure statement Friday with the U.S. Bankruptcy Court for the District of Nevada.

According to the disclosure statement, all assets that have not already been liquidated will be liquidated, and after the liquidation proceeds are distributed to creditors, the company will dissolve.

London Fog said it began winding down its businesses following the sale of its Homestead business.

The company said it still needs to determine the status of a few claims, prosecute litigation, deal with the release of a $700,000 customs bond and distribute roughly $5.4 million in cash on hand under the plan.

Treatment of creditors under the plan will include:

• Administrative claims and priority claims will be paid in full in cash;

• Holders of $17,000 in priority tax claims will be paid in full in deferred cash payments over six years;

• Holders of any secured claims will receive the collateral securing their claims;

• Holders of $11.7 million in general unsecured claims will recover 15% to 27% in cash to be paid after all clerk's fees, U.S. Trustee fees, secured claims, priority claims and administrative claims have been paid in full and after a reserve has been set aside for potential payment of senior claims; and

• Holders of interests and equity-related claims will receive no distribution under the plan.

A hearing on approval of the disclosure statement is scheduled for Oct. 30.

London Fog Group, a Seattle-based apparel company, filed for bankruptcy on March 20, 2006 in the U.S. Bankruptcy Court for the District of Nevada. Its Chapter 11 case number is 06-50146.

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