Amazing Savings Chapter 11 case dismissed

By Caroline Salls

Pittsburgh, July 13 - HIA Trading Associates' Chapter 11 case was dismissed Tuesday by the U.S. Bankruptcy Court for the Southern District of New York.

Under the dismissal order, the company will distribute $900,000 in administrative expenses. The case dismissal will become effective after the distribution is complete.

HIA said it has converted or will convert all of its material assets to $33 million in cash or abandoned any assets that could not be liquidated.

The liquidation proceeds were used to pay the expenses of the liquidation and of the Chapter 11 cases in accordance with its interim cash collateral agreement and to reduce its pre-bankruptcy secured debt.

Since the Chapter 11 filing, HIA said its secured lenders have been paid $18.44 million, leaving a deficiency claim in excess of $4.7 million.

In accordance with the cash collateral order, the secured lenders funded the carve-out and would be entitled to sweep the deposits in HIA's operating account and concentration account, which, as of May 25, is about $970,000.

If the secured lenders were to sweep the accounts, there would be no funds available to pay the remaining administrative expenses.

To provide payment of the remaining administrative expenses, the secured lenders have agreed not to sweep the funds. Professionals employed by HIA and the official committee of unsecured creditors have agreed to accept at least 80% of their fees and 100% of their expenses for the period through March 2003 and payment of any remaining fees only from the carve-out, of which only about $300,000 remains, and any excess cash remaining after payment of other administrative expenses.

In addition, HIA said all other secured creditors have been paid in full the value of the collateral securing their claims.

Also, the secured lenders have agreed to the use of the funds currently in HIA's operating and concentration accounts, as well as funds received before dismissal is granted, to pay the administrative claims, the U.S. Trustee charges (estimated to be about $50,000) and any remaining professional fees.

The company's assets include $1.27 million in cash, including the $970,000 in the operating and concentration accounts, $304,000 remaining in the carve-out, $150,000 of its right, title and interest in the promissory note made by Simply Amazing LLC, a $340,000 interest in a promissory note payable to MDC Owner LLC and claims against Chubb Group of Insurance Cos. for the $2.2 million letter-of-credit for HIA's workers compensation insurance coverage.

HIA's liabilities include $1.1 million in administrative claims and the U.S. Trustee charges estimated at $50,000. Also, the unpaid fees and expenses of the professionals total about $1 million.

The South Plainfield, N.J.-based parent of closeout retailers Amazing Savings and Odd-Job Trading filed for bankruptcy on Jan. 13. Its Chapter 11 case number is 05-10171.

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