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Home Interiors & Gifts has moved from a filed-with-plan reorganization to a confirmed trustee-led liquidation. The debtors filed chapter 11 in Dallas on April 29, 2008, with HIG at the center of a seven-debtor home decor direct-sales platform source filing source filing. The opening disclosure statement described a manufacturer, importer and distributor of candles, framed art and other home accessories sold through roughly 100,000 independent Decorating Consultants; sales had fallen from $615 million in 2003 to about $300 million in 2007, unsecured debt was estimated at $85.2 million to $164.5 million, and a 1998 leveraged transaction had left the company with more than $500 million of debt source filing.
The case quickly became lender-driven. HIG borrowed under a 2004 credit agreement with NexBank, SSB as prepetition agent, stipulated to about $348 million of prepetition loan obligations, and sought a $5.1 million DIP facility plus cash-collateral authority over substantially all assets source filing. The U.S. Trustee appointed an unsecured creditors’ committee including Meredith, Gaylord Hotels, Direct Export, Staff Force and Green Bay Packaging, and the debtors later sought a chapter 11 trustee to break intercreditor deadlock over the sale process source filing source filing. On May 28, 2010, the court confirmed Dennis S. Faulkner’s First Amended Plan of Liquidation, with the effective date 14 days after entry, all debtor assets and causes of action transferring to a Creditor Trust, and Faulkner serving as initial Creditor Trust Trustee source filing.
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