|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.
By Gregory J. Gilligan
To see more of the Richmond Times-Dispatch, or to subscribe to the newspaper,
go to timesdispatch.com.