Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, November 12, 1993 TAG: 9311120149
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
The last stores were at Towers Mall in Roanoke, at Lake Drive Plaza in Vinton, in Covington and in Manteo, N.C.
The voluntary abandonment of the business left little for about 250 unsecured creditors whose claims of $3 million were traded for preferred stock in the company as part of a reorganizational plan in the U.S. Bankruptcy Court in Roanoke.
"We have no assets," Sidney A. Weinstein, chairman of the company, said Thursday. The company went out of business Wednesday.
"We worked very hard," Weinstein said. "Due to the times, we were not able to make it."
His lawyer, John P. Fishwick Jr., said, "Sidney Weinstein fought very hard for three years. He put up a good fight. He just wasn't able to succeed."
In January 1991, the company filed for protection from creditors while it reorganized, reducing from 58 to 20 stores.
At the time of the filing, Weinstein blamed the situation on the general decline in the economy and a downturn in retailing.
In addition to the unsecured creditors, Dominion Bank, now First Union National Bank of Virginia, had a secured claim for $1.7 million.
The plan that converted the claims into preferred stock was approved in March 1992.
Andrew S. Goldstein, attorney for the creditors, said the only assets are insurance on Weinstein's life, which has been assigned to First Union, and a 50-acre tract of land between U.S. 220 south and Peakwood Drive.
That property was valued about three years ago at $750,000, but would be worth more for housing development if it had access to Peakwood, an exclusive residential area. Residents of the street have sued to block the access.
The Bankruptcy Court had said that the property could have access through the lot, ruling that a deed restriction was not applicable under the circumstances.
The U.S. District Court in Roanoke overturned that ruling, limiting the access to U.S. 220.
That decision has been appealed to the U.S. Fourth Circuit Court. Frank Friedman, the lawyer who argued the case Oct. 27 on behalf of Sidney's and the creditors, said he does not expect a decision before January and said it could take longer.
Goldstein said First Union has primary financial interest in the property. But if the Fourth Circuit overrules the District Court, he said, there might be some funds for unsecured creditors, including Central Fidelity Bank.
If the decision on the property is favorable and Sidney's gains access through Peakwood Drive, Goldstein said, First Union Bank is a logical candidate to develop the property. Also, Sidney's as a company might develop the land.
Besides the land, however, "I suspect there's probably not much left," Goldstein said.
He said there was no reason to return the case to Bankruptcy Court except for the possible formality of an order for developing the land after the Fourth Circuit Court acts.
Sidney's was founded in 1922 in downtown Roanoke by the late J.H. "Jake" Weinstein. He named the store for his son, who was then a year old. The family business grew into a six-state enterprise with more than 400 employees. It operated as many as a half-dozen stores in the Roanoke Valley.
by CNB