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Le-Nature's equipment lessor requests conversion of case to Chapter 7 to curb costs
By Caroline Salls
Pittsburgh, Feb. 15 - Le-Nature's, Inc. equipment lessor Merrill Lynch Capital asked the U.S. Bankruptcy Court for the Western District of Pennsylvania to convert the company's Chapter 11 case to Chapter 7 for liquidation, according to a Thursday court filing.
According to the motion, there is no dispute that Le-Nature's ceased its operations shortly before Nov. 1 and has no prospect of seeking anything but liquidation.
Merrill Lynch said Le-Nature's has already incurred more than $3 million in administrative expenses during its Chapter 11 case, and it has yet to liquidate its Latrobe, Pa., bottling facility, which is its primary asset.
Merrill Lynch said it supports the company's plans for a turnkey sale of the Latrobe facility, but the costs of administering the case in Chapter 11 are exorbitant.
In addition, Merrill Lynch said the sale process is expected to cost more than $4 million, and the Chapter 11 trustee has plans to expend another $4 million to go after litigation claims and formulate a plan of liquidation.
If the cases are converted to Chapter 7, Merrill Lynch said Le-Nature's Latrobe facility can be quickly liquidated and any litigation claims can be sought by a Chapter 7 trustee without excessive or redundant costs.
Le-Nature's, a Latrobe, Pa., manufacturer of flavored bottled water and other beverages, had an involuntary Chapter 7 bankruptcy case filed against it on Nov. 1. The case was converted to Chapter 11 on Nov. 3. The case number is 06-25454.
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