Heilig-Meyers Company Announces Filing of Plan of Reorganization and Disclosure Statement

Furniture World Magazine

Heilig-Meyers Company and its wholly owned subsidiaries, Heilig-Meyers Furniture Company, Heilig-Meyers Furniture West, Inc., HMY Star, Inc., HMY RoomStore, Inc., and MacSaver Financial Services, Inc. (collectively the "Companies"), announced that they and the Official Committee of Unsecured Creditors have filed a Joint Plan of Reorganization (the "Plan") and Disclosure Statement with the U.S. Bankruptcy Court for the Eastern District of Virginia. The Bankruptcy Court will conduct a hearing for the purpose of making a determination as to the adequacy of the Disclosure Statement. Once the Bankruptcy Court approves the Disclosure Statement, the Companies will ask creditors to vote in favor or against the Plan. Under the terms of the proposed Plan, pre-petition creditors will receive beneficial interests in a Liquidation Trust in settlement of their claims. The proposed Plan contemplates that only one of the Companies, HMY RoomStore, Inc. will emerge as a reorganized business enterprise ("Reorganized RoomStore"). All other assets will be transferred to a Liquidation Trust to be converted to cash over time for distribution to the beneficiaries of the Liquidation Trust. Additionally, the Reorganized RoomStore common stock will be transferred to the Liquidation Trust for the benefit of the holders of allowed unsecured claims under the Plan. The holders of existing common stock of Heilig-Meyers Company will receive no distribution under the proposed Plan and will have no interest in the Liquidation Trust, and it is anticipated that the existing shares of common stock will be cancelled. Reorganized RoomStore will continue to operate stores under The RoomStore name. The RoomStore offers a wide selection of professionally coordinated home furnishings in complete room packages at value-oriented prices. The RoomStore operates 64 stores located in Pennsylvania, Maryland, Virginia, North Carolina, South Carolina and Texas.