American Appliance Wants Liquidation Sale

An attorney for American Appliance told a judge Tuesday that the bankrupt company wants to reopen some of its appliance and consumer electronics stores for a liquidation sale in an effort to repay creditors. The attorney for the regional chain that operated 24 stores in New Jersey, Pennsylvania and Delaware until closing them last week told U.S. Bankruptcy Judge Judith Wizmur that such a sale would raise more money than just turning the items over to creditors.

The company filed for bankruptcy last Friday.

American Appliance attorney Neal Colton said money raised from a liquidation sale would first go to First Union Corp. and G.E. Capital Corp., the company`s secured creditors. The company would then pay the costs related to filing for bankruptcy.

Any remaining funds would go to those who purchased items and did not get them before the bankruptcy and to pay employees.

The creditors have to approve such a sale.

"At the present time, we do not know whether there will be an agreement with American Appliance`s lenders to allow a joint approach to the liquidation," Colton told The Philadelphia Inquirer for Wednesday`s editions.

The assistant U.S. trustee for the Justice Department, Anthony Sodono, raised concerns that once First Union and G.E. Capital were paid there would be nothing left.

Colton said an effort will be made to repay those who purchased items and never got them.

"Keep your receipts," he said. "We will all try to find a way to get value to them, but it`s not assured."

American Appliance customers and employees can file complaints by calling 856-910-5060 in New Jersey or 215-665-5500 in Pennsylvania.

(Copyright 2001 by The Associated Press. All Rights Reserved.)

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Author: AP