|RoomStore emerges from bankruptcy|
Jun 09, 2005 (Richmond Times-Dispatch - Knight Ridder/Tribune Business News via COMTEX) -- The RoomStore Inc. has emerged from federal bankruptcy court protection as an independent company.
The Richmond-based retailer, which had been a division of former home furnishings giant Heilig-Meyers Co., also named two prominent furniture industry veterans to its board.
Heilig-Meyers and its subsidiaries filed for bankruptcy protection in August 2000. That part of the case remains under the court's protection. A hearing is set for September on how the defunct firm expects to pay its creditors.
Stock in the new The RoomStore will be issued exclusively to the unit's unsecured creditors. About 28 percent of the shares will go to those creditors, who will receive stock worth about 50.4 cents of each dollar owed.
About 5 percent will be reserved for officers and key managers as an incentive.
The remaining 67 percent of the stock will be issued to a trust being created to oversee the final stages of the Heilig-Meyers bankruptcy case. The trustee will be able to distribute those shares to creditors of Heilig-Meyers or sell the stock and give cash to the creditors.
Shareholders of Heilig-Meyers' stock will receive nothing.
The RoomStore also signed a $35 million working capital facility with Bank of America, the company said.
Curtis C. Kimbrell remains as president and chief executive officer of The RoomStore, a position he has held since May 2001. He also was named to the company's board of directors.
Four independent directors also were named:
--Robert Shaffner, the former chief financial officer of Klaussner Furniture Industries Inc., one of the nation's largest furniture manufacturers.
--Ronald Kaplan, a former president of retailer Levitz Furniture.
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