Friedman’s Inc. and Crescent Jewelers, which decided to close up in April 2008, have completed the initial distributions under their liquidating plan last Friday, June 26, 2009, said a statement released by Buchwald Capital Advisors.
The initial distributions were 28.3% for Friedman’s unsecured creditors (whereas the Debtors had projected 22.6% in the Disclosure Statement) and 18.6% for Crescent’s unsecured creditors.
The liquidating trustee for each trust is Buchwald Capital Advisors LLC. Lee E. Buchwald, the President of Buchwald Capital Advisors LLC, also served as the Debtors’ CEO President during their chapter 11 case.
According to a statement, the plan provides for all too rare significant distributions to be made to general unsecured creditors. Total distributions are expected to be approximately 34% for Friedman’s unsecured creditors (whereas the Debtors had projected 31.6% in the Disclosure Statement) and approximately 19% for Crescent’s unsecured creditors.
Buchwald attributes the unanticipated significant recoveries to a number of factors, including the efforts of Moses & Singer, counsel to the Creditors’ Committee, in negotiating a global settlement with Harbinger, the Debtors’ private equity sponsor; the recommendation of Consensus Advisors, financial advisor to the Creditors’ Committee, to pursue a self liquidation instead of selling the assets to a liquidator when the auction process broke down; the successful liquidation of assets under the supervision of Buchwald, Steve Moore, the Debtors’ then-CRO, and a dedicated management team; and the efforts of Stevens & Lee, Debtors’ counsel brought in by Buchwald, who were instrumental in guiding the Debtors during the critical phases of the asset disposition and plan negotiation process, and who achieved better than anticipated results in reducing claims and recovering assets.