| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers H > Headlines for hhgregg, Inc. > News item |
hhgregg debtor’s creditors committee eyes approval of CIT settlement
By Sarah Lizee
Olympia, Wash., May 21 – hhgregg, Inc. debtor Gregg Appliances, Inc.’s official committee of unsecured creditors is seeking court approval to settle and compromise claims relating to a lawsuit filed by Gregg Appliances in February 2018 in an attempt to recover $2.5 million that was allegedly drawn on a letter of credit in favor of defendant CIT Group/Commercial Services, Inc.
The settlement agreement provides that CIT will pay Gregg Appliances a $2.25 million settlement payment, according to a motion filed Monday with the U.S. Bankruptcy Court for the Southern District of Indiana.
As previously reported, the committee said the transfer was made in the 90 days leading up to the hhgregg debtors’ Chapter 11 filing.
According to the complaint, CIT was a creditor that provided financial services and lending to or for Gregg Appliances.
The creditor group alleged that CIT caused Gregg Appliances to issue a $2.5 million letter of credit on Jan. 27, 2017 in its favor. The letter of credit was issued by Wells Fargo Bank, NA.
The committee said CIT drew up to the full amount of the credit line on April 12, 2017, but the draw “was approximately $836,000 more than what was owed to defendant or its clients.”
“As a result of the transfer, defendant received more than defendant would have received if: (i) Gregg Appliances’ case was under Chapter 7 of the Bankruptcy Code; (ii) the transfer had not been made; and (iii) defendant received payments of its debts under the provisions of the Bankruptcy Code,” the committee said in its lawsuit.
hhgregg is an Indianapolis-based specialty retailer of consumer electronics and home appliances. The company filed for bankruptcy on March 6, 2017 under Chapter 11 case number 17-01302.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.