Judge OKs Emporium liquidation.
U.S. Bankruptcy Court Judge Albert Radcliffe on Wednesday approved Emporium's plan to pay creditors, including the retail chain's founder, Dallas Troutman.
Radcliffe signed off on bankrupt Emporium's settlement with Troutman after hearing that it was in the best interest of Emporium's many unsecured creditors, who are owed about $24 million. The company's secured creditors - two finance companies - were paid in full earlier this year.
Under the deal, Troutman is likely to receive about $1 million. An article in Tuesday's Register-Guard had an incorrect estimate of how much Troutman would get.
During testimony in Eugene on Wednesday, it also was revealed that Emporium's creditors will receive about 81 cents on the dollar, much higher than previous estimates, which put the payment at about 60 cents.
Emporium, which filed for bankruptcy last December, wants to make a first payment to creditors by year end, with a follow-up payment next year.
In approving the liquidation plan, Radcliffe commended Emporium and its team of lawyers and advisers for the relatively high payoff. "A distribution of 81 percent for general unsecured creditors is nothing less than superb," he said.
The judge also said Emporium deserved credit for being ready to make a first payment to unsecured creditors less than a year after filing for bankruptcy.
Emporium, staggering under debt, had closed all of its clothing stores by last spring. Most of the firm's $24 million debt is owed to unsecured creditors, including Troutman, clothing manufacturers, equipment suppliers, media outlets and former salaried employees.
Troutman will receive an estimated 81 percent of $1.1 million, or $891,000; $75,000 for rent, and about $47,000 in severance, for a total of $1.013 million.
Other disputes are still simmering, however, including claims of several dozen former salaried employees who are seeking more severance pay than what the Emporium estate has proposed.
Plus, many of those employees want additional payments, alleging the firm violated federal labor laws by not giving them 60 days advance notice that they would lose their jobs.
Attorneys for the estate and Emporium's committee of unsecured creditors told Radcliffe that the settlement with the 73-year-old Troutman was one of the reasons the expected payment level climbed to 81 cents on the dollar.
Troutman had claimed the estate owed him $3.8 million for his roles as Emporium's executive, landlord and lender.
The sides settled on about $1 million after two months of negotiations between Troutman and Emporium's biggest unsecured creditors.
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|Title Annotation:||A plan to pay the bankrupt chain's creditors is approved at 81 cents on the dollar; Business|
|Publication:||The Register-Guard (Eugene, OR)|
|Date:||Oct 30, 2003|
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