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Court Appoints Trustee to Handle Fred Leighton Reorganization

Jan 7, 2009 11:23 AM   By Jeff Miller
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RAPAPORT...  The U.S. Bankruptcy Court for the Southern District of New York appointed a trustee to handle the ongoing reorganization of retailer Fred Leighton Holding. The court appointed Thomas C. Shull of Meridian Ventures, as chief restructuring officer/plan facilitator, on December 18, 2008.

Shull was granted full access, control and plenary authority over all aspects of the debtors’ businesses and affairs, supplanting the authority of Esmerian and any other officer of Fred Leighton. The debtors include Fred Leighton stores in Las Vegas, New York and Beverly Hills, Calypso Mines, Endymion, Foxtrot and Tango. 

In November, lawyers for Merrill Lynch requested that the Chapter 11 trustee be appointed, alleging that owner Ralph Esmerian, "secretly and systematically misappropriated millions of dollars of Merrill Lynch’s cash and non-cash collateral for his own personal benefit." Shull has until February 15, 2009, to investigate and compile lists of the debtors' assets and liabilities, as well as any liens and/or claims of ownership, and report these findings to the court. Shull is to meet with all parties involved in the case in order to negotiate terms of a settlement, to propose recommendations for a reorganization plan, and to recommend resolutions to disputes between Esmerian and Merrill Lynch to the court.
 




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