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M. Fabrikant emerges from bankruptcy
By Caroline Salls
Pittsburgh, May 23 - M. Fabrikant & Sons Inc. emerged from Chapter 11 bankruptcy when its plan of liquidation took effect Thursday, according to a filing with the U.S. Bankruptcy Court for the Southern District of New York.
The plan was confirmed on May 12.
As previously reported, the plan provides for the establishment of two liquidating trusts. The beneficiaries of the first trust are current lenders, and proceeds from the second trust will be distributed to creditors.
Under the liquidation plan, creditor treatment is as follows:
• Holders of administrative expense claims, priority tax claims and other priority claims will receive a full cash recovery;
• Holders of $161.95 million in current lender claims will receive their share of distributions from the Shared Assets Trust;
• Holders of $70.08 million in general unsecured claims against the company will receive a share of trust interests;
• Holders of other secured claims will receive a full cash recovery, have their rights reinstated or receive collateral securing their claim. The trustee for the Shared Assets Trust will decide treatment; and
• Interest holders will receive no distribution under the plan.
Fabrikant, a New York-based manufacturer and distributor of diamonds and gemstone jewelry, filed for Chapter 11 on Nov. 17, 2006. Its case number is 06-12737.
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