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INTERCO CREDITORS SPAR OVER BANKRUPTCY PLAN

INTERCO CREDITORS SPAR OVER BANKRUPTCY PLAN

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Only $5 for 5 months

A federal bankruptcy judge will hear arguments Thursday on whether to allow Interco Inc. to emerge from Chapter 11 bankruptcy this summer.

Approval seems a virtual certainty.St. Louis-based Interco is the parent of the Broyhill and Lane furniture companies, as well as the Florsheim and Converse footwear makers.

Weighed down by heavy debt incurred when management successfully fought off a hostile takeover in 1988, Interco was forced into bankruptcy in January 1991.

Creditors voted earlier this month to approve a bankruptcy reorganization plan.

But four bond-holder groups, two of them controlled by financier Carl Icahn, oppose the plan and will plead their case at the hearing.

The reorganization plan would give Interco's bank lenders 76.5 percent of the stock in the newly reorganized company, plus cash and notes.

Junk-bond holders would receive 23.5 percent of the new company's stock and warrants to buy more stock.

The biggest stakeholder in the re-emerged company would be the Apollo Investment Fund. Apollo is headed by Leon Black, former mergers chief and top deal-maker at the now defunct Drexel Burnham Lambert investment firm.

Icahn and his supporters are a decided minority among Interco creditors in opposing the plan and will have to pull a small miracle to prevent U.S. Bankruptcy Judge James Barta from approving it.

If it is approved, Interco management will have pulled off something of a miracle themselves. Many observers had predicted early on in the bankruptcy process that the company would have to sell off one or more of its four core businesses to survive. Thus far, it has avoided doing that.

Named to board

Four furniture industry leaders have been named to the High Point University Home Furnishings Marketing Advisory Board.

They are: Richard R. Allen, chairman and CEO of LADD Furniture in High Point; Robert G. Culp III, chairman and CEO of Culp Inc.; Pat Plaxico, a noted interior designer from High Point; and Thomas G. Tilley Jr., president and CEO of Lineage Home Furnishings of High Point.

The four join several other furniture executives on the board.

The home furnishings marketing major at High Point University is thought to be the only one of its kind in the United States.

A renter's market

Rent-to-own furniture companies now account for more than $1 billion in annual revenue, a furniture industry trade publication reports.

So-called ``rent-to-rent' operations - as opposed to rent-to-own - account for another $400 million to $500 million, according to Furniture Today, a High Point-based trade newspaper.

The top rental dealers are Aaron Rents of Atlanta with $142 million in annual revenues, Rent-A-Center of Wichita, Kan., with between $125 million and $150 million, and Cort Furniture Rental of Fairfax, Va. with $110 million.

A new Sears

Sears Roebuck continues to charge ahead with the opening of its free-standing Homelife furniture stores.

While visiting Klaussner Furniture Industries in Asheboro last week, National Marketing Manager Don Shaffer said Sears has 65 of the Homelife stores open, with another 10 to 12 scheduled to open by year end.

By the end of 1993, the number may top 100, Shaffer added.

In an effort to boost profitability, Sears is closing most of its furniture departments in its department stores nationwide.

It plans to replace them with more than 200 of the free-standing furniture showrooms by 1995.

Chicago-based Sears will expand some of its furniture departments in existing department stores, renaming them Homelife centers.

The Homelife concept features between 20,000 and 40,000 square feet of showroom space, compared to about 8,000 square feet in a typical Sears furniture department. They also feature more name brands than Sears has featured in the past.

Among lines carried are Klaussner, American Drew, Barcalounger, Broyhill, Sauder and Schnadig.

Sears is a giant furniture retailer. It sells an estimated $1 billion of furniture annually.

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