Pillowtex moves toward reorg
December 5, 2005,
WILMINGTON, Del. -- Nearly two-and-a-half years after it filed for bankruptcy protection, a preliminary disclosure statement and reorganization plan have been filed for Pillowtex Inc.
It’s apparently still a work in progress, however, since several potentially multi-million dollar lawsuits --, including class action and union-led WARN Act suits affecting some 7,500 workers -- are still pending. While the plan has been filed with the federal bankruptcy court here, no date has been set to file objections or set a vote on confirmation.
“We have not yet scheduled a disclosure hearing, we’re still working on finalizing some of the issues of the plan,” said creditors’ committee attorney Mark Indelicato. “Our hope is to get it filed sometime within the next couple of weeks.” The creditors’ committee is a proponent of the plan.
The plan proposes to pay priority tax, administrative, and first- and second-tier secured lenders up to100 percent. A third class of “convenience claims” that includes unsecured creditors who agree to lower their outstanding claims to less than $10,000 would receive a 12 percent payout. A fourth class of general unsecured creditors would receive a pro rated share of the remaining distribution -- an amount not yet set because of the pending litigation, among other reasons. Equity holders would receive no payouts under the proposal.