Filene's, Syms promises consensual disclosure statement, plan July 13

By Jim Witters

Wilmington, Del., July 9 - Filene's Basement, LLC and Syms Corp. hope to file a revised plan of reorganization and disclosure statement on July 11 or July 12 so that a scheduled hearing for the approval of the disclosure statement on July 13 can move forward without objection, lawyers said Monday.

Representatives of the company, the official committee of unsecured creditors and the official committee of equity security holders made "lots of progress" over the weekend in working through unresolved issues, debtors attorney Jay M. Goffman said during a teleconference July 9 in the U.S. Bankruptcy Court for the District of Delaware.

"If the progress continues this way, we will be able to file a revised plan and disclosure statement on Wednesday (July 11) and get consensual approval on Friday (July 13)," Goffman said.

The parties came away from a June mediation with a handshake agreement, the terms of which are being woven into the plan of reorganization and the associated disclosure statement.

Goffman said the plan is scheduled for confirmation on Aug. 29, with an effective date of Sept. 15.

Judge Kevin J. Carey told the parties he wanted an e-mail update by 5 p.m. ET on July 9. Another telephonic status conference is scheduled for 4 p.m. ET on July 10.

"All the material terms should be locked in and filed by the day before (the July 13 hearing), but some changes can occur the day of," Carey said. "It depends on what those changes are."

Mark T. Power, representing the official committee of unsecured creditors, said he is "highly optimistic" that there will be a deal by July 13. If there is no deal, he will seek the earliest possible date for a hearing on the contested matters.

Rights offering

Also during the teleconference, Carey approved a questionnaire for investors to determine which are "accredited investors" who will be offered new shares in the company's planned stock offering.

As part of the proposed plan of reorganization, the company would issue about 10 million new shares of common stock at $2.49 a share to raise $25 million.

The shares would be issued in a private placement to accredited investors only.

Much of that money is earmarked as new working capital for the reorganized company.

The remainder would be split between the creditors and the company's redemption of the shares held by Marcy Syms.

Exclusivity, other motions

With the parties making progress toward a consensual plan, Carey granted the debtors an extension through July 31 of its exclusive period for filing a Chapter 11 plan.

The ruling came following an oral motion from Goffman.

The debtors have another motion pending to extend the exclusive periods for filing a plan and soliciting acceptances. Carey continued that matter to a July 31 hearing.

Also carried over to a July 13 hearing were the following motions:

• The creditors committee's motion to disband the equity committee or limit its scope;

• The equity committee's motion to terminate exclusivity;

• The debtors' motion to appoint an examiner to investigate possible estate causes of action; and

• The creditors committee's motion to terminate exclusivity.

Syms, a Secaucus, N.J.-based off-price clothing retailer, filed for bankruptcy on Nov. 2, 2011 in the U.S. Bankruptcy Court for the District of Delaware, along with wholly owned subsidiary Filene's Basement. The joint Chapter 11 case number is 11-13511.

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