LAVAL, Que. – Insolvent Hart Stores Inc. (TSXV:HIS) has clarified an announcement last week about $6 million earmarked for creditors, saying the sum to be paid over three years is aimed specifically at unsecured creditors.
“The proposed payment of $6 million under the plan of arrangement does not directly affect Hart Stores’ secured creditors,” the company said in a release Tuesday.
Under the plan, unsecured creditors may elect to receive their pro rata share of the $6 million or a lump-sum payment equal to the lesser of the value of their claim or $1,000, Hart said.
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When Hart Stores received protection under the Companies’ Creditors Arrangement Act on Aug. 30, it owned about $23.1 million to its unsecured creditors.
The unsecured creditors, as well as some of Hart’s lessors and employees, have until Jan. 31 to file their proofs of claim with the monitor, RSM Richter Inc..
Together they are in line to collect about 20 cents on the dollar, the company said.
The department store retailer, which has said it owes $56.1 million overall to creditors, including $1.8 million to governments, was earlier granted an order by the Quebec Superior Court authorizing it to file the plan of arrangement.
The court also extended the company’s protection under the under the Companies’ Creditors Arrangement Act to March 14.
Hart Stores has 88 mid-sized department stores under the Hart, Bargain Giant and Geant des Aubaines banners, of which 28 have been slated for closure in early this year.
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