UPDATE 1-Linens 'n Things to emerge from Chapter 11 in '09
(Adds dateline, background on bankruptcy filing, reorganization)
LOS ANGELES, Aug 29 (Reuters) - Home goods retailer Linens 'n Things on Friday filed a plan of reorganization that will allow the company to emerge from bankruptcy early next year.
The retailer's parent company, Linens Holding Co, said it filed a plan with the U.S. Bankruptcy Court in Delaware that has the support of its senior lenders, an official committee of unsecured creditors and an ad hoc committee of senior note holders.
Like many retailers of home goods -- including Bed Bath & Beyond Inc (BBBY.O) and Williams-Sonoma Inc (WSM.N) -- Linens 'n Things has struggled mightily in the wake of the U.S. housing bust and global credit crisis. It filed for Chapter 11 bankruptcy protection in May and later began liquidating 120 of its more than 500 stores.
The company had begun a turnaround effort in 2006, the same year it was bought by Leon Black's Apollo Group. The strategy, however, wilted in the face of a weakening U.S. economy.
The Clifton, New Jersey company's reorganization plan calls for senior lenders to be paid in full and for senior noteholders to convert the majority of their debt into substantially all of the ownership of the reorganized company. Unsecured creditors will receive warrants to buy common stock in the new company.
In conjunction with the plan's filing, Executive Chairman Robert DiNicola resigned from his post but will remain an member of the board of directors. (Reporting by Nichola Groom)
