Levitz gets court OK to hire wind-down officer despite U.S. Trustee's objection

By Caroline Salls

Pittsburgh, March 16 - Levitz Home Furnishings, Inc. obtained court approval to hire Walker, Truesdell & Associates, Inc. as the wind-down officer in its Chapter 11 case, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The U.S. Trustee's objection to the appointment was overruled.

According to the objection, the company's motion seeks to sidestep bankruptcy law, which requires the appointment of a trustee and/or the conversion of the case to Chapter 7 under the circumstances of the company's case.

The U.S. Trustee asked the court to either appoint a Chapter 11 trustee or convert the case to Chapter 7 for liquidation.

According to the U.S. Trustee's motion, Levitz has sold substantially all of its assets, does not have any personnel, including officers and directors, and cannot confirm a plan of reorganization.

However, instead of seeking the appointment of a Chapter 11 trustee or conversion to Chapter 7, the company proposed the installation of a trustee in "the guise of a wind-down officer" as means of liquidating through Chapter 11.

Levitz, a Woodbury, N.Y., furniture retailer, filed for bankruptcy on Oct. 11. Its Chapter 11 case number is 05-45189.

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