Musicland files liquidation plan; secured trade claimants to receive remaining assets

By Caroline Salls

Pittsburgh, May 15 - Musicland Holding Corp. filed a plan of liquidation Friday with the U.S. Bankruptcy Court for the Southern District of New York, under which general unsecured creditors will receive no distribution.

Following emergence from bankruptcy, the company will continue to exist only to liquidate and wind up its estates.

Under the plan, holders of administrative, other priority and other secured claims will receive full recovery in cash.

Holders of secured trade claims will receive their share of available and remaining assets and their share of a secured trade creditor release after payment of administrative expense, disputed administrative expense, other priority, other secured and priority tax claims.

Secured trade creditors include Buena Vista Home Entertainment, Inc.; EMI Music North America; Metro-Goldwyn-Mayer Home Entertainment LLC; Paramount Pictures, Home Video Division; Sony BMG Music Distribution; Sony Pictures Home Entertainment Inc.; Twentieth Century Fox Home Entertainment LLC; Universal Music and Video Distribution; Warner/Elektra/Atlantic Corp. and Warner Home Video Inc.

Existing stock and interests will be canceled, and holders will receive no distribution under the plan.

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

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