The U.S. Bankruptcy Court issued an order denying the motion filed by Affirmative Insurance Holdings’ Court-affirmed rehabilitator seeking to dismiss the Chapter 11 proceeding.
The order states, “Upon consideration of the Motion of Anne Melissa Dowling, Acting Director of Insurance of the State of Illinois, in her role as Statutory and Court-Affirmed Rehabilitator, for Entry of an Order Dismissing the Debtors’ Chapter 11 cases; the Court having reviewed the Motion to Dismiss and the objections thereto; the Court having heard the statements of counsel and parties in interest regarding the Motion to Dismiss at a hearing before the Court on March 10, 2015.”
The order continues, “It is hereby Ordered that the Motion is Denied, without prejudice.” The Court subsequently approved the Debtors’ official committee of unsecured creditors’ motion to convert the Chapter 11 reorganization case to a liquidation under Chapter 7. The committee had previously argued, “…[T]he Debtors have no business to reorganize, the Debtors’ estates are administratively insolvent, and, currently, the Debtors have no hope of confirming a feasible plan of reorganization or liquidation. Converting the Chapter 11 Cases at this juncture will allow an independent Chapter 7 trustee, not influenced by the Debtors’ management, to pursue and seek to monetize un-liquidated and contingent assets for the benefit of the Debtors’ creditors, including holders of the Debtors’ approximately $100 million in unsecured debt (the Committee’s constituents).”
The Court further states, “These cases are straight liquidations with no benefit whatsoever to remaining in Chapter 11 and incurring costs to the estate that would be incurred in Chapter 7.”
The U.S. Trustee assigned to the case filed with the Court a notice of appointment of an interim Chapter 7 trustee. The U.S. Trustee named Don A. Beskrone, Esq. as the interim trustee. The notice states, “You are hereby notified of your appointment in an asset case as Interim Trustee/Trustee of the estate of the above named debtor. The amount of your bond has been fixed by the United States Trustee.”
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