Hartmarx will allow creditors' committee to file Chapter 11 plan

Hartmarx Corp., once a Chicago-based men's suit maker, decided to allow the creditors' committee to file a Chapter 11 plan when the company's exclusive right to propose a plan expires March 22.

The last time around on so-called exclusivity, the committee opposed and sought the ability to file a liquidating plan of its own. The result was a compromise where the committee could file a competing plan if the version filed by the company wasn't to the committee's liking.

With the committee in opposition to more exclusivity, the company agreed to allow the committee alone to file a plan. Otherwise, Hartmarx is seeking a fifth extension of exclusivity prohibiting anyone other than the committee from filing a plan before July 23.

The hearing on the new exclusivity motion will be held in bankruptcy court in Chicago on March 18.

The bankruptcy judge in June authorized the sale of the business to Emerisque Brands U.K. Ltd. and SKNL North America Ltd. for $119 million, including $70.5 million cash, the assumption of $33.5 million in debt, and a junior secured note for $15 million.

Hartmarx filed under Chapter 11 in January 2009, listing assets of $483 million and debt totaling $261 million as of October 2008. Debt at filing included $114 million on a revolving credit, $15.5 million in industrial revenue bonds, $12 million in mortgages, and $70 million owing to trade suppliers.

Manufacturing was performed in the company's own facilities and by contractors. The brand names included Hart Schaffner Marx and Hickey Freeman.

The case is In re XMH Corp., 09-02046, U.S. District Court, Northern District Illinois (Chicago).