Circuit City Group (fka CCTYQ)

[paxman9270]

http://www2.timesdispatch.com/business/business/2010/jul/23/b-circ23-ar-347441/

Richmond, VA: An impasse between Circuit City and a group of its largest creditors that has delayed the approval of its liquidation plan has been settled, thanks to the help of an outside mediator.

Lawyers for both parties told U.S. Bankruptcy Judge Kevin R. Huennekens yesterday that they reached a compromise on differences at a mediation session in Norfolk last week. Huennekens had ordered the parties to attend mediation last month.

"We think we've resolved the issues," Jeffrey N. Pomerantz, a lawyer for the creditors committee, said via telephone during the hearing.

The sides are awaiting a decision from a Canadian court on a pending tax issue that cropped up from the sale of Circuit City's Canadian division. The ruling could open up issues that would need to be mediated.

Gregg M. Galardi, Circuit City's lead attorney in its bankruptcy case, told Huennekens that drafts of the agreement were being prepared and that he would pass those on to the creditors' lawyers soon for them to review.

The liquidation plan would spell out how creditors would be paid.

A final hearing date to approve the plan was not set, though Circuit City and the creditors hoped to do so in September.

The plan was filed in November. A hearing on approving that plan had been put off several times since then because of various issues.

As the company worked to settle the issues, the creditors committee and Circuit City continued to work out details of the plan. Frustrated by the lack of progress, the creditors' committee filed its own plan in June.

Among the issues were details in the bylaws and makeup of a committee that will oversee a liquidating trust set up to distribute any remaining money from the sale of the company's assets.

At yesterday's hearing Galardi said the amount creditors are set to receive would not change. In the original plan filed last year, unsecured creditors, such as suppliers, would get as much as 13.5 cents on each dollar owed.