TMG Liquidation: court approves former Merit Group's disclosure statement; plan hearing Dec. 16

By Lisa Kerner

Charlotte, N.C., Nov. 1 - TMG Liquidation Co.'s disclosure statement was approved by the U.S. Bankruptcy Court for the District of South Carolina on Tuesday, according to an attorney familiar with the case.

The plan confirmation hearing will be held on Dec. 16, the attorney said.

As previously reported, TMG, formerly Merit Group, Inc., filed an amended plan in September that incorporated a Regions Bank settlement and changed the treatment of convenience claims.

Under the plan, a liquidating supervisor will be appointed to administer the assets remaining after the sale of substantially all of Merit's assets is complete, as well as to make plan distributions, wind up the company's estates and wrap up the Chapter 11 case.

Creditor treatment

The treatment of creditors will include:

• Holders of administrative claims, non-tax priority claims and priority tax claims will be paid in full in cash;

• Holders of secured claims will be paid in full or receive the collateral securing their claims;

• Holders of convenience claims will recover 10%, versus an up to $300 cash payment under the original plan;

• Holders of unsecured claims will receive a share of net distributable proceeds after all administrative, priority, convenience, secured claims and plan expenses are paid in full;

• Subordinated claims will share in the unsecured claim distribution if Regions Bank is paid in full in accordance with the Regions settlement; and

• Interest holders will receive no distribution.

Merit, a Spartanburg, S.C., paint sundry distributor, filed for bankruptcy on May 17. The Chapter 11 case number is 11-03216.

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