NITRO, W.VA. -- Heck's Inc.'s bankruptcy troubles have attracted the attention of a speculator who is buying up small pieces of the retailer's $140 million debt.
First Portland Corp. of St. Paul, Minn., has bought at least 42 claims filed by Heck's creditors, taking a $125,360 stake in the case, U.S. Bankruptcy Court records show.
"We're told they're offering 10 cents on the dollar," said William Dobb, an attorney for a committee of Heck's creditors. "They are purchasing other creditors' claims ... obviously because they think there's going to be a much larger payment than 10 cents on the dollar."
Federal bankruptcy officials eventually will decide how much to pay Heck's 2,300 creditors, and Portland is gambling that the amount will top what it is paying to buy the claims. If Heck's is forced to liquidate, however, the payoff could be low or even nonexistent.
Portland's smallest claim, at $333, was bought from Victor Products Corp. The largest claim, at $25,593, was bought from Kellogg Brush Mfg., according to court records.
The firm filed in February for protection from creditors under Chapter 11 of the U.S. bankruptcy law.