UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):September 7, 2005
HECHINGER LIQUIDATION TRUST
(Exact name of registrant as specified in its charter)
| | | | | |
| Delaware | | 000-50160 | | 52-7230151 |
| |
| (State or other jurisdiction of | | (Commission File | | (I.R.S. Employer |
| incorporation or organization) | | Number) | | Identification No.) |
| | | | | |
| 405 East Gude Drive, Suite 206, | | | | 20850 |
| Rockville, MD | | | | |
| | | | | |
| (Address of principal executive | | | | (Zip Code) |
| offices) | | | | |
Registrant’s telephone number, including area code: 301-838-4311
ITEM 8.01. Other Events
Hechinger Liquidation Trust (the “Liquidation Trust”) is pursuing an adversary proceeding known as the “Committee Action” against certain former officers and directors of Hechinger Company (the “Officer and Director Defendants”), Fleet Retail Finance Inc. (“Fleet Retail”), General Electric Credit Corp. (“GECC”), and others.
On September 7, 2005, the Liquidation Trust approved a settlement agreement between the Liquidation Trustee and the Officer and Director Defendants with respect to the Committee Action. In accordance with the procedures set forth in the Plan under which the Liquidation Trust was established, approval of the settlement agreement has been obtained from the Committee that represents the interests of the beneficiaries of the Liquidation Trust. Under the terms of the agreement, the $7.0 million settlement amount will be paid to the Liquidation Trust within 45 days after its approval of the settlement. Once the settlement payment is made, the Liquidation Trust will dismiss the Committee Action as against the Officer and Director Defendants. The settlement has no effect on the Liquidation Trust’s claims against any other defendant in the Committee Action.
During July 2005, the United States District Court for the District of Delaware (the “District Court”) issued a memorandum opinion and order on pending summary judgment motions (collectively, the “Summary Judgment Decision”), dismissing the Trust’s claims against Fleet Retail, GECC, and certain other defendants in the Committee Action. The Liquidation Trust is in the process of reviewing and determining its response to the District Court’s August 2005 substantive denial of the Liquidation Trust’s motion for reconsideration of the Summary Judgment Decision.
The Liquidation Trust is also pursuing an adversary proceeding known as the “Bondholder Action” against Fleet Retail and GECC. In March 2004, the District Court issued an opinion and order (collectively, “the Decision”), directing the entry of judgment in favor of Fleet Retail and GECC. The Liquidation Trust appealed the Decision, and in July 2005 the United States Court of Appeals for the Third Circuit (the “Court of Appeals”) issued its Opinion affirming the March 2004 Decision. The Liquidation Trust’s motion for reconsideration and reversal of the Court of Appeals Opinion was denied by the Court of Appeals during August 2005. The Liquidation Trust is in the process of reviewing the decisions of the Court of Appeals in the Bondholder Action, and determining its response thereto.
Pursuant to a stipulation between the Liquidation Trust and Fleet Retail, the Liquidation Trust had previously established a Fleet Reserve totaling $11.0 million. The stipulation, filed as Exhibit 99.4 of the Liquidation Trust’s Form 10 Filing dated January 28, 2003, contains provisions pursuant to which Fleet Retail may seek reimbursement of certain legal fees and expenses in the event of certain outcomes in proceedings by the Liquidation Trust against Fleet Retail, including the ultimate resolution of the Committee Action and the Bondholder Action in favor of Fleet Retail.
In the event the Committee Action and/or the Bondholder Action are ultimately resolved in favor of Fleet Retail (by a final, non-appealable order or settlement approved by the Bankruptcy Court), then Fleet Retail may seek immediate reimbursement of the reasonable legal fees and expenses incurred by Fleet Retail in defense of the Action or Actions ultimately resolved in favor of Fleet Retail, up to the $11.0 million balance of the Fleet Reserve. Such reimbursement cannot be demanded until the appeal period has passed, and is subject to review by the Bankruptcy Court.
There can be no assurance of the outcome of any action the Liquidation Trust may take to obtain a reversal of the decisions of the Court of Appeals in the Bondholder Action, or the Summary Judgment Decision in the Committee Action.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| | HECHINGER LIQUIDATION TRUST |
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| Date: September 13, 2005 | | By: /s/ Conrad F. Hocking |
| | Name: Conrad F. Hocking |
| | Title: Liquidation Trustee |
