Judge Confirms Bankruptcy Reorganization Plan for Goldberg Kohn Client

March 9, 2007

Judge Christopher Sontchi of the United States Bankruptcy Court for the District of Delaware confirmed the plan of reorganization proposed by Home Products International, Inc. ("HPI") and its operating subsidiary on March 8. The Chicago law firm of Goldberg Kohn represented HPI, with Ronald Barliant and Kathryn A. Pamenter leading the representation.

Ms. Pamenter, in her argument to the court, noted that the confirmation hearing was only 75 days after HPI filed its Chapter 11 cases. "The plan was the result of the cooperative efforts of many people," she said.  

Mr. Barliant said after the hearing,  "It is very professionally satisfying that we were able to confirm a plan in less than three months, have the Court comment upon the case being extremely well run, and have our client emerge from bankruptcy with jobs intact, trade creditor support and a solid balance sheet. Despite its recent critics, Chapter 11 can and does work."

The plan eliminates $116 million of interest bearing notes by exchanging that debt for 95 percent of the company’s new stock. The remaining stock will be issued to HPI’s existing shareholders. The plan also makes available an opportunity to participate in a $25 million convertible notes offering to holders of the debt and former shareholders.  All creditors except the holders of the notes are not impaired and will be paid in full.  

"This is very good news in that it is a critical first step toward HPI's exit from bankruptcy," commented Don Hotz, Chief Financial Officer of HPI. "We are very proud of the fact that our general unsecured creditors remained unimpaired throughout this process."

The plan was supported by all the holders of the notes who voted, representing more than $93 million of the total $116 million in notes. It was also accepted by holders of 7.7 million shares of HPI stock. Only one stockholder, with 330 shares, rejected the plan.

Mr. Barliant, a principal at Goldberg Kohn and a former bankruptcy judge, and Ms. Pamenter, counsel at Goldberg Kohn, concentrate their practice in the area of debtor representation.

HPI’s bankruptcy became necessary because of a number of factors, such as an increase in resin and steel prices; excess capacity in the marketplace; payments due on a $5.6 million interest payment; bumping up against an availability requirement under a pre-petition financing agreement; an inability to increase prices to compensate for supply increases; and other inflationary factors in play.  The company – which employs 700 people throughout four factories in the United States and Mexico – sells its products under the HOMZ™ brand through national and regional retailers.