Carter Hawley Reorganization Approved by Shareholders, Creditors
LOS ANGELES (AP) _ Carter Hawley Hale Stores Inc., the West’s biggest retailer, announced that shareholders and creditors approved its reorganization plan to emerge from Chapter 11 bankruptcy protection.
Some 96 percent of unsecured creditors and 98 percent of holders of unsecured claims approved the plan, the Los Angeles-based company said in a statement Thursday.
Some 98 percent of common stockholders who voted also approved the plan.
The reorganization also was supported by Carter Hawley’s largest secured creditors, The Prudential and Bank of America.
A hearing on confirmation of the reorganization plan was set for Monday before U.S. Bankruptcy Judge Barry Russell. Carter Hawley filed for Chapter 11 bankruptcy protection in February 1991.
Carter Hawley is the West’s biggest retailer with 87 department stores under the names The Broadway, The Broadway Southwest, Emporium and Weinstocks.
The plan would give 75 percent ownership of Carter Hawley to the Zell- Chilmark Fund, which bought most of the company’s unsecured debts. The fund was set up by Chicago businessman Sam Zell to bail out troubled companies.
It would trim $600 million in debt from the company’s books, set up a credit line with General Electric Capital Corp. and put in place long-term financing from The Prudential and Bank of America.
The company also plans to spend $325 million to fix its aging stores as it withdraws from creditor protection.
In a 1987 restructuring, Carter Hawley loaded up on debt and spun off its Neiman Marcus group to fend off an unwanted takeover attempt by Limited Inc.