Inner City Media administratively insolvent, requests case dismissal

By Caroline Salls

Pittsburgh, July 28 – Inner City Media Corp. asked the U.S. Bankruptcy Court for the Southern District of New York to dismiss its Chapter 11 case, according to a Monday court filing.

“At this point, the debtors have no operations, employees or property,” the company said in the motion.

“The debtors cannot effectuate a Chapter 11 plan of reorganization or liquidation, have no assets to make distributions to unsecured creditors and, if these cases were converted to cases under Chapter 7, they would be instantly and permanently administratively insolvent.”

Inner City said the estates are actually already administratively insolvent, and the debtors have not paid estates professional fees for the past eight months because the escrow account set up for that purpose has been depleted.

According to the motion, the main activity that has occurred in the Inner City cases in the past two years has been an artwork-related adversary proceeding, in which the debtors are only involved as nominal defendants. The company said the pending adversary proceeding is not a bar to dismissal of the Chapter 11 cases.

“The debtors’ professionals should not be required to finance these Chapter 11 cases, which have no purpose other than to serve as a vessel for the artwork adversary proceeding,” the motion said.

A hearing is scheduled for Sept. 8.

Inner City Media is a New York-based radio company. An involuntary bankruptcy case was filed against the company on Aug. 19, 2011. The Chapter 11 case number is 11-13697.

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