Ritz Camera case converted to Chapter 7; millions in assets remain

By Jim Witters

Wilmington, Del., Jan. 15 - Ritz Camera & Image, LLC's Chapter 11 bankruptcy case was converted to Chapter 7 during a Tuesday hearing in the U.S. Bankruptcy Court for the District of Delaware.

The conversion came at the request of Ritz and with the consent of the official committee of unsecured creditors and secured lender Crystal Financial LLC.

Judge Kevin Gross said that this second bankruptcy case for Ritz "simply did not have enough funding to get through the Chapter 11 process."

He congratulated the debtors' attorneys for not "running the case into the ground" and for leaving cash and other assets that the Chapter 7 trustee can work with.

The company ceased all business operations after its going-out-of-business sales concluded in October.

Ritz attorney Irving E. Walker said the assets remaining in the estate include:

• The company's former distribution center in Topeka, Kan., "with a value in the millions;"

• A $3 million claim for fraudulent transfers against Canon Camera that is being litigated;

• A case against Sandisk Corp. that is in the federal appeals court;

• A potential litigation against a manufacturer of lithium-ion batteries;

• A claim in the bankruptcy court against $800,000 in credit card hold-back funds that Ritz believes it is entitled to; and

• About $50,000 in cash.

Crystal Financial attorney Wendy Walker said there is about $3.5 million outstanding on the company's debtor-in-possession financing facility.

Ritz Camera & Image, a Beltsville, Md.-based specialty camera and image chain, filed for Chapter 11 bankruptcy on June 22. Its case number is 12-11868.

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