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Retailer’s Creditors in the bankruptcy case of Liberty House have voted in support of turning ownership of the retailer over to its lenders, but the decision is not set in stone.
lenders may
get ownership
But the creditors' vote
to hand over Liberty House
isn't the last wordBy Tim Ruel
Star-Bulletin
"I do know that the process is not over yet," said Bruce Bennett, attorney for Liberty House in its nearly 3-year-old Chapter 11 bankruptcy case. Creditors can still opt to change their votes, Bennett said.
In the vote filed yesterday with the U.S. Bankruptcy Court, creditors approved the plan -- submitted jointly by its lenders, creditors and Liberty House management -- by a 343-294 margin.
A total of 637 votes were cast, about 30 percent of the retailer's 2,000 to 2,200 creditors. The result of the vote goes to U.S. Bankruptcy Judge Lloyd King, who will decide Liberty House's fate.
The reorganization bid would satisfy $40 million in claims and issue $130 million in new stock to the lenders. Creditors in favor of the plan represented a total of $154.3 million in claims, while those against held $34.5 million in claims.
One group of creditors, vendors and suppliers who aren't secured for claims, voted to oppose the plan, 202-194. They could still ask King to change their votes, possibly reversing that loss, Bennett said. Not all classes of creditors have to approve the plan. "Irrespective of the vote, this process is moving forward," Bennett said.