Sunday, March 04, 2001

Wilkinson stores move cases to Ky.




The Associated Press

        LEXINGTON — Two Lexington companies owned by former Gov. Wallace Wilkinson agreed to move their Chapter 11 bankruptcy cases to U.S. Bankruptcy Court in Lexington from Wilmington, Del., where they were filed this week.

        Meanwhile, the companies, which laid off 60 employees on Thursday, are continuing attempts to arrange the financing they need to keep operating.

        Judge William S. Howard signed the transfer order for the two cases Friday in Lexington. The order means bankruptcies filed by Wallace's Bookstores and Wallace's Book Co., as well as by Mr. Wilkinson himself, can proceed, and they will be treated as one case.

        Attorneys for the Wilkinson companies told Judge Howard on Thursday that the Delaware filing was required by IBJ Whitehall Financial Group., a subsidiary of the International Bank of Japan, before it would provide $40 million in financing to keep the companies going for another 60 days.

        Without the loan, “we are basically shut down,” said Barbara Edelman, an attorney for the bookstores.

        IBJ thinks the Wilkinson companies will have to be sold and that the Delaware court would be a better venue, the attorneys said.

        But all activity in the Delaware case, including the loan, was frozen by the motion to have the case transferred to Kentucky.

        Mr. Wilkinson filed a personal Chapter 11 bankruptcy in February. His incomplete filings show he owes at least $340 million in business-related debts, while his companies have declared $52.2 million in debts.

       



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- Wilkinson stores move cases to Ky.