Levitz Furniture U.S. Trustee asks court to convert bankruptcy case to Chapter 7

By Caroline Salls

Pittsburgh, Aug. 27 - Levitz Furniture's U.S. Trustee asked the U.S. Bankruptcy Court for the Southern District of New York to either convert the company's Chapter 11 case to Chapter 7 bankruptcy for liquidation or dismiss the case, according to a Tuesday court filing.

According to the motion filed by Region 2 U.S. trustee Diana G. Adams, Levitz has sold substantially all of its assets, and its exclusive period to file a plan of reorganization expired with no plan or disclosure statement having been filed.

"The debtor's operating reports demonstrate that, at best, the debtor has a razor thin margin of administrative solvency," Adams said in the motion.

As a result, Adams said the operating reports show that Levitz is not be able to make any meaningful distribution to its non-administrative creditors.

Levitz, a New York-based specialty retailer of furniture, bedding and home furnishings, filed for bankruptcy on Nov. 8, 2007. Its Chapter 11 case number is 07-13532.

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