Reorganization Plan

Valu Food Inc. filed a reorganization plan yesterday that aims to get the Baltimore-based independent grocer out of bankruptcy proceedings by the end of March.The reorganization plan comes 13 months after the company sought protection under Chapter 11 of the U.S. Bankruptcy Code. Valu Food, which at its peak had 14 stores, now has six and employs about 400 people."The reorganization plan will not call for closing any more stores," said Louis Denrich, president of the chain. "The company is what it is now. We believe it will be successful."

A U.S. bankruptcy judge has approved Hechinger Co.'s plan to spend $6.3 million to retain more than 12,000 employees, the Largo-based home improvement retailer said yesterday.The troubled chain, which filed for Chapter 11 bankruptcy protection June 11, said its plan covers all employees -- except senior managers -- who work at its remaining 117 stores, the headquarters in Largo and a support services building in Virginia Beach, Va.Under the plan, employees will receive retention bonuses and sales achievement incentives.

Crown Books Corp. has emerged from 16 months in Chapter 11 bankruptcy protection with a reorganization plan that includes discounted books and a "significant" Internet presence, but analysts predict a tough road ahead for the retailer.Steven Panagos, the Landover company's interim chief executive officer and a partner in the New York crisis management firm Zolfo Cooper LLC, said yesterday the reorganization plan cancels all of the company's old common stock.The company, which has 92 stores, will emerge debt-free by distributing 5 million shares of its new stock to its creditors.

The surprising reorganization plan presented for Merry-Go-Round Enterprises Inc. last week has something for everybody.Creditors would get what they want most: 100 percent of their money, paid as early as this summer. Present shareholders would receive as much as 25 percent ownership in a reorganized Merry-Go-Round -- far more than what some analysts had been expecting.Managers at the Joppa-based fashion retailer would benefit, too. The tentative plan would let them focus on running the stores instead of on negotiating with creditors.

Several investment groups are interested in buying a big ownership stake in Merry-Go-Round Enterprises Inc., PPTC development that could spark a bidding contest for the troubled fashion chain and complicate its bankruptcy reorganization.No formal offers have been made; no money is on the table. One group, led by former Zale Corp. Chief Executive Dennis S. Bookshester, said that its interest is preliminary and that it won't move until it can examine Merry-Go-Round's books -- at Merry-Go-Round's expense.

Blue Cross and Blue Shield of Maryland Inc. is apparently seeking last-minute legislation that would allow the historically nonprofit insurer to reorganize and sell stock to investors -- a controversial plan the state insurance commissioner rejected in January as a violation of state law.Rather than submit a new plan to the commissioner, Blue Cross officials scheduled a meeting last night in Annapolis with House Speaker Casper R. Taylor Jr. to discuss changing...

An investment group led by retail executive Dennis Bookshester is no longer interested in buying Merry-Go-Round Enterprises Inc. and bringing it out of bankruptcy, an attorney representing the group said yesterday."

Merry-Go-Round Enterprises Inc. filed a reorganization plan yesterday, taking another step toward emerging from bankruptcy proceedings.The plan presents details of an agreement reached late last year in which unsecured creditors of the Joppa-based retailer would receive a 75 percent ownership stake in the reorganized company and current shareholders would get 25 percent.Unsecured creditors, who are owed about $225 million, would also receive up to $130 million in cash and notes.fTC Under the present timetable, Merry-Go-Round will leave bankruptcy this summer -- but not necessarily by the previous target of June 30, company attorney Roger Frankel said yesterday.

Expressing "great confidence" in state insurance commissioner Dwight K. Bartlett III, Gov. Parris N. Glendening said yesterday that he fully agreed with Mr. Bartlett's rejection of Blue Cross and Blue Shield of Maryland's reorganization plan."

A Texas investor who controls 106,000 shares of stock in Merry-Go-Round Enterprises Inc. has objected to the Joppa-based retailer's tentative plan of bankruptcy reorganization.But Edwin A. Allseitz Jr.'s filing in U.S. Bankruptcy Court in Baltimore is not expected to derail a reorganization scheme that the company's major creditors and shareholder committee have tentatively approved.Mr. Allseitz, a Dickinson, Texas, stockbroker, argued that the existing plan would unfairly profit Merry-Go-Round's creditors at the expense of shareholders.

What's good for General Motors may not be so great for Maryland. A radical reorganization plan laid out by GM management this week could eliminate more than 2,000 Maryland jobs if as many as 40 of GM's 100 dealerships in the state close, as proposed by the company. The jobs of 240 workers at GM's Powertrain Baltimore Transmission Plant in White Marsh could be more secure if the Obama administration approves the GM reorganization plan because the modern, efficient plant produces parts for Chevrolet and GMC brands, which the company plans to continue producing . Meanwhile Maryland's larger GM dealers are hoping to pick up market shares and possibly add employees through the downsizing.

As parents and educators react to Andres Alonso's plans to close failing schools and expand successful ones, the Baltimore schools chief is proposing a central office reorganization to help principals execute increased responsibilities. The $1.27 billion budget proposal unveiled this week would cut the central office by 15 percent, or 179 positions. Employees will have the option of applying for other jobs within the system, including more than 50 new positions to assist principals with troubleshooting as they head into a second year of decentralized management.

W.R. Grace & Co. said it may be forced to delay its exit from bankruptcy because it cannot get acceptable terms for a $1 billion loan the company says it needs to help to pay creditors. Grace, a specialty chemicals and construction materials company based in Columbia, made the disclosure in a filing yesterday with the U.S. Securities and Exchange Commission. Grace, in bankruptcy since 2001, has promised to pay creditors and people hurt by its asbestos products $3.9 billion under a reorganization plan the company plans to submit to a court for approval this year.

A Baltimore bankruptcy judge said yesterday that he would confirm a reorganization plan for Columbia's Fieldstone Mortgage Co. as early as today, making it one of few subprime lenders to survive bankruptcy since the credit crisis began. Fieldstone filed for Chapter 11 protection in November, having already shuttered operations and whittled its work force to 25 from 1,000. Most of the remaining employees will join the reorganized business, now funded and run by Planet Financial Group LLC, which court documents describe as a Delaware "holding company for financial assets and operating entities."

Vertis Communications Inc. said yesterday that it would merge with one of its largest competitors in the second attempt to combine the two debt-laden companies amid declines in the advertising and printing industries. The Baltimore company's plans last year to buy Brentwood, Tenn.-based American Color Graphics failed, but it said the two firms will now merge through a so-called prepackaged bankruptcy proceeding, which would reduce their combined debt by nearly $1 billion. The two companies said the deal would give them a larger and more competitive foothold in the industry.

W.R. Grace & Co., the Columbia chemical maker in bankruptcy protection since 2001, lost exclusive rights to file its reorganization plan after a federal judge ruled against the company yesterday. Judge Judith K. Fitzgerald of the U.S. Bankruptcy Court in Wilmington, Del., denied Grace's 10th request for exclusive rights to file its reorganization plan. The move, which is unusual in bankruptcy proceedings, means any creditor may file a competing reorganization plan. Grace filed for Chapter 11 bankruptcy in April 2001 to protect itself from 135,000 asbestos claims spanning several decades.

A federal bankruptcy judge gave United Airlines yesterday a Nov. 1 deadline to file a plan for exiting Chapter 11, and said if it fails to do so it risks losing control of its destiny. United has won 10 extensions of its exclusive right to determine its reorganization plan for leaving bankruptcy. "No further extensions will be granted in the absence of compelling and unforeseeable circumstances," Judge Eugene Wedoff said. Some of United's banking creditors want more say in the airline's business plan.

W.R. Grace & Co., a Columbia-based maker of specialty chemicals that is going through bankruptcy, said yesterday that it has revised its reorganization plan and won the support of two creditor committees. Two other committees, representing asbestos personal injury and property claimants, still object to the plan, which maintains a proposal to limit Grace's asbestos-related liabilities to $1.61 billion. In a filing yesterday with the Securities and Exchange Commission, Grace said the revised plan addresses "many of the objections raised by creditors and other interested parties to the plan," which originally was filed with U.S. Bankruptcy Court in Delaware in November.

Paul J. Norris, who presided over W.R. Grace & Co.'s move from Florida to Maryland and steered it into bankruptcy protection in the face of thousands of asbestos-injury lawsuits, will step down as chief executive of the maker of chemicals and building materials in May, the company announced yesterday. He will be succeeded by Fred Festa, 45, who joined Grace last year as president and chief operating officer. Norris will remain on the board of directors as non-executive chairman, focusing on the company's bankruptcy reorganization.

W.R. Grace & Co., the Columbia chemical maker undergoing bankruptcy proceedings, has proposed a reorganization plan that would limit its asbestos-related liabilities to $1.61 billion and add its name to a growing list of companies trying to end years of legal wrangling. Struggling under the weight of 325,000 asbestos-related injury lawsuits, the 150-year-old company followed the lead of several of its competitors and filed for bankruptcy protection in 2001. The reorganization plan submitted to the U.S. Bankruptcy Court in Wilmington, Del., would set up a trust to handle the asbestos claims, which have left a cloud of uncertainty over the company for years.