U.S. Bankruptcy Judge Jerry Funk said at an April 8 hearing he will confirm Stein Mart Inc.’s Chapter 11 reorganization plan, the company’s lead attorney said.
The Jacksonville-based fashion retailer, which closed all of its stores last year, filed a plan in January that calls for secured and priority claims to be paid off but leaves little money for unsecured claims.
Funk withheld confirmation of the plan in a March 29 order because of concerns about third-party releases.
The U.S. Trustee for the case and the Securities and Exchange Commission objected to the plan because not all parties agreed to the releases.
However, those objections were resolved and attorneys for the U.S. Trustee and SEC stated their desire to confirm the reorganization plan at the April 8 hearing, said Gardner Davis of Foley & Lardner, Stein Mart’s lead attorney in the case.
Funk provided clarification on his March 29 order at the hearing, Davis said.
“Judge Funk said that consistent with his clarification and his prior order, he would enter an order confirming the plan as soon as the parties in interest could sign off on the language,” he said.
Davis expects Funk to sign the confirmation order early next week.
Stein Mart filed its Chapter 11 petitions Aug. 12 in U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division.
The company immediately began going-out-of-business sales and closed the last of its 281 stores Oct. 26.
The corporation is dissolving when the Chapter 11 case ends. But Miami-based Retail Ecommerce Ventures acquired Stein Mart’s intellectual property for $6.2 million in a bankruptcy court auction and relaunched steinmart.com early in 2021.
The reorganization plan will pay unsecured creditors about 8% of their claims, Funk’s March 29 order said, but 91% of unsecured creditors approved the plan.
Davis said the Chapter 11 case was resolved relatively quickly despite the difficulties of the COVID-19 pandemic and heavy caseload for the court.
“Stein Mart involved over $700 million of debt and 10,000 creditors,” Davis said.
“Nevertheless, the Bankruptcy Court handled the case smoothly, bringing the case to a successful conclusion in less than eight months.”