Tuesday Morning Corp. has struck a settlement with investment firms that had tried to convince fellow trade creditors of the bankrupt off-price retailer to vote against a restructuring proposal, resolving the dispute as the company prepares to exit chapter 11, WSJ Pro Bankruptcy reported. The firms led by Invictus Global Management LLC agreed to drop an appeal, vote in favor of Tuesday Morning’s chapter 11 plan and encourage fellow unsecured creditors to do the same, according to the settlement outlined in papers filed yesterday in U.S. Bankruptcy Court in Dallas. The two sides reached the deal just days after the judge overseeing Tuesday Morning’s bankruptcy ruled the firms published false and misleading information to rally creditor opposition to the restructuring plan and ordered them to be sanctioned. The materials, including the website rejectTuesdayMorningPlan.com, claimed that trade debt would likely get repaid at a higher interest rate if creditors voted against the restructuring plan. Other creditors and Tuesday Morning said that was misleading because the materials didn’t include cautionary information disclosing risks associated with rejecting the plan that was described in official information distributed by the company.
