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Bombay Co. expects bankruptcy plan approval

August 21, 2008|From Bloomberg News

Home-furnishing retailer Bombay Co., which has liquidated its 388 stores, has obtained a commitment from a U.S. bankruptcy judge in Fort Worth to sign a confirmation order approving a Chapter 11 plan, according to the company's lawyer.

The disclosure statement explaining the plan predicted that unsecured creditors would receive 16.4% to 28.9% on their claims.

Holders of gift cards are in a separate class and are to receive 25%.

The plan was proposed by the company together with the creditors' committee.

Gordon Brothers Retail Partners and Hilco Merchant Resources were hired to liquidate the inventory when no one would buy the stores as a going concern.

They guaranteed Bombay a recovery of not less than 109.5% of the cost of the inventory.

The two liquidators also bought the trademarks, trade names and other intellectual property for $2 million in cash, giving Bombay creditors a 25% interest in profits they generate from the intellectual property.

On filing under Chapter 11 in September, Fort Worth-based Bombay listed assets of $164 million and debt totaling $109 million, including secured claims of $79.6 million and unsecured claims of $28.6 million.

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