Claire’s Stores Inc. reached a settlement yesterday with unhappy junior bondholder Oaktree Capital Management LP, just as a confirmation hearing on the retailer’s bankruptcy plan was about to get under way, freeing senior creditors to eventually take control of the business, WSJ Pro Bankruptcy reported. The group of junior creditors that includes Oaktree will now recover at least 18 percent of what they are owed and possibly up to 25 percent, depending on the company’s operating results, according to terms announced yesterday in U.S. Bankruptcy Court in Wilmington, Del. Originally, the group was supposed to get about 1 percent, a number later increased to almost 15 percent. The settlement means that the retailer won’t have a contested bankruptcy hearing, which had been expected to last more than three days. The parties are putting finishing touches on the settlement and are scheduled to appear again in court today to seek approval of the new plan. Oaktree will now vote yes on Claire’s reorganization plan.
