Musicland creditors committee seeks approval of agreements with preference defendants

By Reshmi Basu

New York, Dec. 12 - Musicland Holding Corp.'s official committee of unsecured creditors requested court approval of a settlement agreement with four preference defendants, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

According to the motion, the company and the creditors committee have sought the return of payments from creditors received 90 days prior to Musicland's bankruptcy filing. After negotiations with certain parties, Musicland arrived at a proposed settlement under which the company will receive $51,500 from the defendants.

Meanwhile, all the parties have agreed to mutual releases.

Specifics of the settlement include:

• AT&T, Inc. will pay $26,000 to Musicland;

• Certegy Check Services, Inc. will pay $14,000;

• Sony Electronics will pay $6,500; and

• The Lacek Group will pay $5,000.

A hearing is scheduled for Jan. 3.

Musicland, a Minnetonka, Minn., specialty retailer of pre-recorded entertainment software products, filed for bankruptcy on Jan. 12, 2006. Its Chapter 11 case number is 06-10064.

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