Report: Judge vetoes Shopko plan to settle bankruptcy
A federal judge in Wisconsin has reportedly struck down a proposed deal that would resolve bankrupt department store retailer Shopko’s liquidation of its business.
According to the Green Bay Press Gazette, U.S. Bankruptcy Court Judge Thomas Saladino refused to approve a plan that would have paid all Shopko’s bank debt by July 2019, and also paid most administrative claims, obtain a $15 million settlement from private equity firm Sun Capital Partners to settle a claim of improper dividend payments, and potentially provided some money to pay unsecured creditors.
Saladino reportedly praised Shopko and its representatives for their efforts in devising the proposal, but declined to approve it because it would have prevented creditors from pursuing legal claims against Shopko, its executives, directors, and associates.
Shopko, which filed for Chapter 11 bankruptcy in January 2019, announced in March that Gordon Brothers would oversee a liquidation process that would take 10-12 weeks. The company plans to shutter all 363 stores.
According to the Green Bay Press Gazette, U.S. Bankruptcy Court Judge Thomas Saladino refused to approve a plan that would have paid all Shopko’s bank debt by July 2019, and also paid most administrative claims, obtain a $15 million settlement from private equity firm Sun Capital Partners to settle a claim of improper dividend payments, and potentially provided some money to pay unsecured creditors.
Saladino reportedly praised Shopko and its representatives for their efforts in devising the proposal, but declined to approve it because it would have prevented creditors from pursuing legal claims against Shopko, its executives, directors, and associates.
Shopko, which filed for Chapter 11 bankruptcy in January 2019, announced in March that Gordon Brothers would oversee a liquidation process that would take 10-12 weeks. The company plans to shutter all 363 stores.