Connaught Group's disclosure statement approval postponed for revisions

By Sahara Marte

New York, July 17 - Connaught Group, Ltd. was denied approval of its disclosure statement at a hearing Tuesday in the U.S. Bankruptcy Court for the Southern District of New York.

Even though no objections were filed with the court, judge Stuart Bernstein said there were several alterations that must be made.

The disclosure statement describes creditors as "impaired" and that term must be removed before the statement can be approved, Bernstein added.

A new hearing for approval is set for Aug. 14.

If it is revised before that date, it will be approved over a phone call.

As previously reported, treatment of creditors under the company's plan of liquidation will include:

• Holders of administrative claims, priority tax claims and priority non-tax claims will be paid in full in cash;

• Holders of secured claims will either be paid in full in cash or receive the collateral securing the claims;

• Holders of general unsecured claims will receive a share of proceeds remaining after payment of administrative, priority and secured claims; and

• Holders of equity interests and intercompany claims will receive no distribution.

The plan was filed jointly with the official committee of unsecured creditors.

Connaught is a New York-based direct seller of high-end women's apparel in the United States. The company filed for bankruptcy on Feb. 9 under Chapter 11 case number 12-10512.

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