Walking eyes late April emergence; disclosure statement approved

By Caroline Salls

Pittsburgh, March 22 - The Walking Co.'s disclosure statement was approved Friday by the U.S. Bankruptcy Court for the Central District of California.

The plan of reorganization confirmation hearing is scheduled for April 23.

According to a company news release, Walking expects its plan of reorganization to be confirmed and funding to close in time for it to emerge from bankruptcy early in the week of April 26.

As previously reported, the company submitted a reorganization plan to keep 207 of its 214 current store locations open and pay off all of its debts and future obligations to trade creditors.

Creditor treatment will include:

• Walking's exit financing will be used to refinance the company's pre-bankruptcy debt and debtor-in-possession loan obligations;

• Holders of secured noteholder claims will have their notes reinstated, provided, however, that the principal amount of the notes be reduced to $19.5 million, representing the cancellation of a total of $960,000 of paid-in-kind interest. These creditors will also share $423,602 in interest payments;

• Holders of other secured claims will either be paid in full in cash or receive the collateral securing the claim. The maturity of the claims will be reinstated;

• Holders of reclamation claims will be paid in full with interest;

• Holders of priority unsecured claims and general unsecured claims will be paid in full in cash;

• Holders of intercompany claims and existing common stock will be reinstated; and

• Holders of employee stock option note claims will have their notes amended to extend the maturity date to 18 months from the plan effective date.

Walking, a Santa Barbara, Calif.-based comfort footwear retailer, filed for bankruptcy on Dec. 7. Its Chapter 11 case number is 09-15138.

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