Musicland Shells Out $26M To Secured Debt Holders

Law360, New York (August 11, 2006, 12:00 AM EDT) -- Two months after Musicland presented a liquidation plan that stiffs unsecured creditors and current shareholders, a federal bankruptcy judge has approved the entertainment retailer’s motion to repay $26 million to the holders of secured trade debt.

On Thursday, U.S. Bankruptcy Judge Stuart Bernstein gave the green light to the motion, a key part of the company’s controversial liquidation strategy.

“The debtors are authorized to immediately repay up to $26,000,000 of the principal amount due and outstanding to the collateral agent to be distributed to the holders...
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