Wickes files liquidation plan to distribute remaining assets, litigation proceeds

By Caroline Salls

Pittsburgh, Sept. 6 - Wickes, Inc. filed a plan of liquidation and related disclosure statement Wednesday with the U.S. Bankruptcy Court for the Northern District of Illinois.

The plan was filed in conjunction with the company's official committee of unsecured creditors.

According to the disclosure statement, substantially all of the company's operating assets have been sold.

The plan calls for the liquidation of Wickes' remaining assets, including litigation proceeds, which will be distributed to creditors.

On the plan effective date, a liquidating trust will be established and the trustee will be responsible for liquidating the company's remaining assets and making distributions to creditors from cash on hand, the liquidation proceeds and litigation proceeds.

Treatment of creditors under the plan will include:

• Holders of $2.1 million in secured claims will recover 100% in either cash or the return of the collateral securing the claim;

• Holders of $10,376 in other priority claims will recover 100% in cash;

• Holders of $2.42 million in convenience claims will recover 15% in cash, with a maximum distribution of $750 and a minimum distribution of $15.00;

• Holders of $434.56 million in tort claims will not receive any distribution under the plan, but the company will lift any injunctions that keep these creditors from seeking any applicable insurance proceeds. In addition, $100,000 will be held in escrow for these claimants to cover any shortfalls in insurance proceeds;

• Holders of $37 million to $46.5 million in general unsecured claims will recover 10% in cash, plus additional net recoveries from litigation claims; and

• Interest holders will receive no distribution under the plan.

As previously reported, the company has reached a global settlement agreement that would resolve four pending lawsuits, and a hearing for court approval of the settlement is scheduled for Sept. 12.

The global settlement deal comprises four agreements that would net the company at least $4.1 million.

Wickes, a Vernon Hills, Ill.-based supplier of building materials, filed for bankruptcy on Jan. 20, 2004. Its Chapter 11 case number is 04-02221.

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