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AltosGroups ordered to show why case shouldn’t be converted, dismissed
By Sarah Lizee
Olympia, Wash., May 2 – AltosGroups, LLC has been ordered by the U.S. Bankruptcy Court for the Middle District of Florida to show why its Chapter 11 bankruptcy case shouldn’t be converted or dismissed.
A hearing is scheduled for May 15, according to a minute entry filed Tuesday.
As previously reported, Region 21 U.S. trustee Mary Ida Townson filed a motion for dismissal or conversion.
She said that since their January petition, the debtors have been required by bankruptcy code and court orders to close prepetition accounts and transfer funds they control to debtor-in-possession accounts in authorized depositories.
The U.S. trustee said they have ignored that requirement, putting at risk more than $4.6 million in deposits in the debtors’ control.
“As the court is no doubt aware, there has been recent instability in the banking system that heightens the already vital need to ensure that bankruptcy estate funds are properly protected, especially when those funds exceed FDIC insurance coverage,” Townson said in her motion.
“Furthermore, debtors’ flagrant non-compliance combined with the lack of recent account records leaves the $4.6 million dollars unaccounted.”
The U.S. trustee said the debtors provided her with what appears to be proof of opening DIP accounts at Regions Bank on March 23 and March 24, but they hadn’t yet transferred the $4.6 million to the DIP accounts or closed the prepetition accounts.
The court ordered the debtors to move the funds into DIP accounts by April 24.
AltosGroups is a Davenport, Fla.-based hotel lender. It filed Chapter 11 bankruptcy on Jan. 9 under case number 23-00048.
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