Movie Gallery files reorganization plan
UPDATE: Chairman, CEO Joe Malugen to remain director
By Cindy Spielvogel -- Video Business, 12/27/2007
DEC. 27 | UPDATE: Movie Gallery filed its reorganization plan and disclosure statement late Dec. 22 with the U.S. Bankruptcy Court in Richmond.A hearing to consider approval of the disclosure statement has been set for Jan. 29.
Movie Gallery said it plans to ask the court to confirm the plan early in the second quarter and hopes to emerge from bankruptcy soon afterwards.
The plan is similar to what Movie Gallery specified when it filed for bankruptcy protection in October. It involves converting debt owed to creditor Sopris Capital Advisors into equity in the reorganized company.
The plan was filed with the Securities and Exchange Commission Dec. 27. Current Movie Gallery chairman and CEO Joe Malugen will remain director, and the other six members of the board of the reorganized company will be designated or approved by Sopris, according to the filing.
The plan also calls for current equity interests to be canceled and new common stock to be issued.
Of the new common stock, 10% will be reserved for grants under the reorganized company’s equity incentive program for directors.
