The U.S. Bankruptcy Court denied PFO Global’s motion to convert its Chapter 11 reorganization case to a Chapter 7 liquidation and issued an order directing the appointment of a Chapter 11 trustee.
The order states, “Ordered that the Motion is Denied; it is further Ordered that the Office of the United States Trustee is directed to appoint a chapter 11 trustee for the Debtors and their estates; on or before July 12, 2017, the Chapter 11 Trustee shall file a status report and plan of action for keeping the cases in chapter 11 and the Court will determine at the status conference whether to convert the cases to chapter 7 or keep them in chapter 11; and that the Court will conduct a status conference on July 13, 2017.”
As previously reported, the Company sought conversion on the following grounds: “The Debtors believe conversion and continuation of the Bankruptcy Cases under Chapter 7 are in their best interests and the best interests of their creditors. In light of the lack of any progress in the raising of the necessary funds for a reorganization (or debtor in possession financing) by the UCC, the Unsecured Creditors and the Debtors and the mounting expenses accrued by the Debtors, their creditors, and other parties in interest, the Debtors believe an orderly liquidation proceeding carried out according to the provisions of Chapter 7 of the Bankruptcy Code will minimize future expenses and provide for maximum distribution to creditors.”
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