IN RE HEILIG-MEYERS COMPANY

DOUGLAS TICE, Chief Judge, Bankruptcy

This matter came before the Court upon the Third Interim Application of BDO Seidman LLP ("BDO") for Allowance of Compensation and Reimbursement of Expenses (the "Fee Application") filed by BDO. It appearing to the Court that this Court's Final Order Pursuant to Sections 361 and 363 of the Bankruptcy Code and Rule 4001 of the Federal Rules of Bankruptcy Procedure Providing the Pre-Petition Secured Lenders Supplemental Adequate Protection (the "Supplemental Adequate Protection Order") provides that any fees and expenses incurred after the date of the Supplemental Adequate Protection Order in excess of $1,250,000 of the respective professionals of the Debtors, the official committee of unsecured creditors (the "Creditors' Committee"), or any other representatives of the Debtors' estates (including, but not limited to, any trustee hereafter appointed for the estate of any of the Debtors, whether in the Chapter 11 cases or in the event of the conversion of any Chapter 11 case to a liquidation under Chapter 7 of the Bankruptcy Code) in connection with the investigation, commencement or prosecution (including any discovery proceedings) of any adversary proceeding or contested matter challenging the validity, extent, priority, enforceability or avoidability of any of the liens or security interests in favor of the Pre-Petition Collateral Agent or the Pre-Petition Secured Lenders (the "Bank Preference Litigation") or any transfers by any of the Debtors to or for the benefit of any of such parties (the "Fee Cap") (a) shall not be eligible for inclusion in or payment from the Carve-Out (as defined in the Supplemental Adequate Protection Order); and (b) shall not be paid from borrowings under the Replacement DIP Facility (as defined in the Supplemental Adequate Protection Order); and it further appearing that the Fee Cap has been reached; and the Court having determined that the legal and factual bases set forth in the Fee Application establish just cause for the relief granted herein:

THE COURT HEREBY FINDS THAT:

A. Capitalized terms not otherwise defined have the meanings given to them in the Fee Application.

B. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334.

C. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2).

D. The Fee Application and the notice thereof comply with the applicable requirements of the Bankruptcy Code, the Bankruptcy Rules and the Administrative Order Establishing Procedures for Interim Compensation and Reimbursement of Expenses of Professionals, dated August 16, 2000 (the "Administrative Order").

E. BDO's compensation for services rendered in connection with the Debtors' chapter 11 cases, for which it seeks interim allowance in the Fee Application, is reasonable and appropriate under sections 330(a)(1)(A) and 331 of the Bankruptcy Code.

F. BDO's expenses incurred in the Fee Application, are actual and necessary expenses under sections 330(a)(1)(B) and 331 of the Bankruptcy Code.

IT IS HEREBY ORDERED THAT:

1. The Fee Application is GRANTED.

2. Interim compensation of $12,396.50 and reimbursement of expenses of $37.50 incurred by BDO as accountant to the Creditors' Committee for the period from September 1, 2003 through August 31, 2004 is allowed.

3. The Debtors are authorized and directed to pay BDO (a) $12,434.00 for professional services and disbursements incurred by BDO during the period September 1, 2003 through August 31, 2004, minus (b) any amounts which have been paid by the Debtors pursuant to the Administrative Order, provided, however, that the Debtor shall only pay the fees of BDO for services related to the Bank Preference Litigation from funds in which the Bank Group does not have a security interest.

4. Upon entry, the Clerk shall serve a copy of this Order on those parties on the attached Service List.