Frank’s Becomes Real Estate Corporation
Frank's Nursery & Crafts, Inc. announced that on July 27, 2005, its Second Amended Chapter 11 Plan of Reorganization became effective and it has formally emerged from Chapter 11. The reorganized company will operate as a real estate development company under the name FNC Realty Corporation.
FNC Realty Corporation will retain approximately 42 parcels of real estate for development and will continue to hold certain other properties until such properties can be sold. As previously announced, funding for the plan has been provided by certain shareholders of the company in the form of convertible notes in the aggregate principal amount of approximately $77 million and a $20 million equity investment. The plan generally provides that all unsecured claims will be paid in full, plus post-petition interest. Shareholders owning 5,000 shares or less will receive $.75 per share in cash. Shareholders owning more than 5,000 shares were provided the option either to receive $.75 per share in cash, or to exchange their existing shares for shares in the reorganized company (subject to dilution). Shareholders who are accredited investors and held more than 100,000 shares were also offered the right to invest in the convertible notes and equity to be issued by FNC Realty Corporation, pro rata with the Plan funders.
Distributions under the Plan commenced on July 27, 2005, and will be completed as soon as practicable. Twenty-five holders of approximately 15.2 million shares of the company's common stock elected to exchange their shares of common stock for stock in the reorganized company, and 15 of such holders, holding approximately 14.3 million shares, elected to invest in the convertible notes and equity. Thus, FNC Realty Corporation will be a private company with approximately 25 shareholders.
Frank's Nursery & Crafts, Inc., headquartered in Troy, Mich., formerly operated the largest chain (as measured by sales) in the United States of specialty retail stores devoted to the sale of lawn and garden products, according to the company.