Strauss Discount Auto parent files plan of reorganization to be funded by asset sale

By Caroline Salls

Pittsburgh, Feb. 16 - Strauss Discount Auto parent R&S Parts and Service Inc. filed its plan of reorganization and related disclosure statement Thursday with the U.S. Bankruptcy Court for the District of New Jersey.

According to the disclosure statement, the plan distributes the proceeds of a sale of substantially all of the company's assets and any recoveries from avoidance actions and litigation filed against Monro Muffler Brake, Inc.

On the plan's effective date, the company will sell substantially all of its assets to an entity to be created by an investor, including inventory, machinery, equipment, furniture, fixtures, contracts, intellectual property, patents, copyrights, trademarks, real estate interests including leases and stock of subsidiaries.

The new company will be capitalized by a $10 million cash infusion by the investor.

Treatment of creditors under the plan will include:

• Holders of Kimco secured claims will be paid in full on the effective date;

• Holders of other secured claims will, at the company's option, either have their claim reinstated, receive full cash payment or receive the collateral securing their claims;

• Holders of unsecured claims will be paid in full, without interest, in four annual installments, with 10% to be paid 90 days after the effective date; 20% on the first anniversary of the effective date; 30% on the second anniversary of the effective date; and 40% on the third anniversary of the effective date.

To the extent that the amount of unsecured claims exceeds the $20.5 million maximum, the disclosure statement will be amended to reflect an adjusted distribution to these creditors;

• Intercompany claims will be cancelled; and

• Interest holders will retain their interests.

Strauss, a South River, N.J.-based auto parts retailer, filed for bankruptcy on Aug. 10, 2006. Its Chapter 11 case number is 06-17475.

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