Major Creditors Line Up Behind Macy’s Reorganization Plan

Major creditors of R.H. Macy & Co. appeared to back the retailer’s proposed terms of reorganization Monday, boosting the company’s chances of remaining independent when it emerges from bankruptcy.

The New York-based retailer wants to maintain its Macy’s, Bullock’s and I. Magnin stores in an independent company and has resisted a merger bid from Cincinnati-based Federated Department Stores.

Macy’s, which has been mired in Chapter 11 bankruptcy proceedings since January, 1992, must reach agreement with its creditors on the value of its retail operations and then must negotiate the amount of compensation or equity that creditors and bondholders will receive in exchange for forgiving the company’s outstanding debts.

Macy’s officials would not comment about a board meeting Monday, but company sources said the directors supported--but modified--a reorganization proposal submitted by the company’s management.

The board’s action came as one major secured creditor--Boston-based Fidelity Investments--announced support for the management-drafted plan. GE Capital, another secured creditor, also backed the plan.

Meanwhile, another major creditor, Swiss Bank Mortgages, opposed an alternate plan backed by Laurence Tisch, a member of Macy’s board.

Macy’s on Monday also presented its plan to Cyrus R. Vance, a court-appointed mediator for Macy’s and its creditors.

The plan will be formally submitted to all creditors Wednesday.