Robb & Stucky can't meet plan requirements, Chapter 11 case dismissed

By Caroline Salls

Pittsburgh, March 20 - Robb & Stucky Ltd. LLLP's Chapter 11 bankruptcy case has been dismissed, according to a March 20 filing with the U.S. Bankruptcy Court for the Middle District of Florida.

As previously reported, the company asked the court to dismiss the case in August 2011 because it is unable to meet the requirements of a Chapter 11 plan.

Robb & Stucky sold substantially all its assets to Hudson Capital Partners LLC and Hyperams LLS in March 2011 for $30.9 million.

The proceeds of the liquidation efforts went to pay Bank of America NA, which provided $25 million in debtor-in-possession financing, leaving less than $8 million to pay other claims, according to the dismissal motion.

The claims of CIRS Financing LLC and CIRS Management LLC, referred to in documents as Collier lenders, exceed $14.6 million.

"With the termination of BofA's role in this case, the debtor does not have working capital or financing to operate its business and requires the use of the Collier lenders' cash collateral to finance its wind down," the company said in the motion.

"The debtor is unable to fully repay all of its secured creditors, including the Collier lenders, and likely will not have sufficient funds to make a distribution to unsecured priority claims, let alone pay them in full as required to confirm a Chapter 11 plan."

According to the March 20 order, Robb & Stucky also received court approval in January of a settlement agreement, under which CIRS Financing and CIRS Management allowed the company to use Collier cash collateral for wind-down expenses.

In exchange, Robb & Stucky agreed to grant CIRS blanket replacement liens on all of its unencumbered cash to the extent of $300,000 and assign its remaining accounts receivables to the Collier lenders.

Also in August 2011, U.S. Trustee Donald F. Walton asked the court to convert the case to Chapter 7 bankruptcy rather than dismiss it.

The U.S. Trustee said "the cost of administration of a Chapter 7 estate would likely be less than the cost of the wind-down of this estate and clearly would result in a more equitable distribution scheme."

Since there are not enough assets to satisfy all administrative claims of the estate, and the company's proposed distribution scheme favors the professionals who would recover100% of their claims, Walton said that other administrative creditors are not being treated in accordance with the priorities of the Bankruptcy Code.

Robb & Stucky, a Sarasota, Fla.-based retailer of upscale furnishings, filed for bankruptcy on Feb. 18. Its Chapter 11 case number is 11-02801.

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