Montgomery Ward said it has had its Chapter 11 reorganization plan approved by the Delaware Federal Bankruptcy Court and that it expects to implement the plan and emerge from bankruptcy proceedings "within the next few weeks."
As previously announced, unsecured creditors will receive pro-rated shares of a $650 million account established for the purpose, while its primary creditor and largest shareholder, GE Capital, will get its mail-order business.
The court approval of the plan, which also had creditor backing, is "a strong validation of our reorganization efforts," said CEO Roger Goddu. He indicated the recovery of Ward is tied to the expansion of the chain's new format stores. The "first prototypes have reflected sales increases of approximately 40 percentage points above the combined performance of the rest of the chain," since the first three opened last September, he said.
Ward is "in the process of converting 40 additional stores to the new prototype this year," Goddu said. The chain currently has 252 outlets.