The U.S. Bankruptcy Court issued a revised order converting Constellation Enterprises’ Chapter 11 reorganization case to a liquidation under Chapter 7.
The order states, “The Debtors’ chapter 11 cases shall be converted…to cases under chapter 7 of the Bankruptcy Code, effective on October 2, 2017 at 5pm. (the ‘Conversion Date’) … The U.S. Trustee is hereby directed to appoint a chapter 7 trustee to oversee the Debtor’s chapter 7 bankruptcy cases.” As previously reported, the Company sought conversion on the following grounds: “Conversion of these cases to cases under chapter 7 is in the best interests of the Debtors’ estates. As noted above, there are insufficient funds in the estates or otherwise available to the estates to pay accrued administrative expenses and the anticipated administrative expenses that may be incurred if the Debtors remain in chapter 11 to complete their wind-down and conclude their cases.”
In addition, “For example, prior to the conclusion of these cases, the Debtors may need to, among other things, (i) formulate agreed procedures to distribute the funds in the Employee Funding Escrow and, if necessary, obtain Court approval of such procedures, (ii) analyze and, if appropriate, prosecute certain causes of action, including causes of action arising under chapter 5 of the Bankruptcy Code, that remained with the Debtors after the closing of the Sales, and (iii) resolve the WARN Adversary. The Debtors believe that a chapter 7 trustee can more affordably complete such tasks and effectively bring these cases to their conclusion.”
Read more bankruptcy news.