TROY, MI-A former garden store chain has been given court approval to emerge from bankruptcy as a real estate development company. Frank's Nursery & Crafts, Inc., which filed for Chapter 11 bankruptcy in September 2004, expects to emerge from bankruptcy as a real estate company in July.
The federal Bankruptcy Court for the Southern District of New York entered an order confirming Frank's plan of reorganization on Wednesday. The plan is based on Frank's retaining approximately 42 parcels of real estate, all of which were formerlyFrank's stores, which will be developed by the reorganized company. The chain closed all of its stores by the end of the 2004 Christmas shopping season.
The company has approximately $97 million in funding lined up--$77 million from shareholders and a $20-million equity investment. Twenty-five of the company's largest shareholders have decided to exchange their shares in Frank's for the new company, which will be a private business upon emergence from the bankruptcy.
Early this year, the company had begun soliciting potential buyers for its properties, but reconsidered that plan in mid-February. By mid-March, it had filed a reorganization plan with the court, seeking to emerge from bankruptcy with its remaining real estate holdings intact.
The locally based company was once the largest lawn and garden specialty store chain in the US. At the time of the bankruptcy it had more than 150 stores in 14 states. The company had previously weathered a 2001-02 bankruptcy.
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