Musicland Liquidation Plan Stiffs Creditors, Shareholders

Law360, New York (May 15, 2006, 12:00 AM EDT) -- Under the proposed liquidation plan of bankrupt entertainment retailer Musicland Holding Corp., the company’s unsecured creditors and current shareholders stand to come out of the ordeal empty-handed.

According to the plan, which was filed in the U.S. Bankruptcy Court in Manhattan, unsecured creditors and shareholders will not be reimbursed for any of their claims. Shareholders’ company stock is also set to be canceled.

Faring slightly better, secured-trade creditors will receive payment for their claims through a part of Musicland’s remaining and available assets.

If the liquidation...
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