| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers T > Headlines for TSIC, Inc. > News item |
Sharper Image gift-card holders ask court to convert company's bankruptcy case to Chapter 7
By Jennifer Lanning Drey
Portland, Ore., July 29 - A group of TSIC, Inc., formerly Sharper Image Corp., gift-card holders asked the U.S. Bankruptcy Court for the District of Delaware to convert the company's Chapter 11 bankruptcy case to Chapter 7 for liquidation, according to a Monday filing.
According to the motion, which was filed by TSIC gift-card holder Frederic B. Prohov, TSIC's bankruptcy case requires conversion to Chapter 7 because of the substantial continuing loss and absence of the likelihood of rehabilitation.
Prohov noted that TSIC is liquidating its assets and said there is significant risk of administrative insolvency.
Prohov also argued that the case should be converted so that gift-card holders "will not be prejudiced by the unavoidable bias of a debtor-in-possession and committee who endeavor to reduce or eliminate these claims."
"As the estate teeters on the brink of administrative insolvency, the debtor and the committee are surely aware the allowance of such priority claims would overwhelm the estate and render confirmation of a plan impossible due to the requirement ... that priority claims be paid in full."
The creditors want a neutral party such as a Chapter 7 trustee to be appointed to evaluate gift-card claims.
According to the motion, TSIC reported deferred revenue, presumed to be gift cards, of $34 million at Oct. 31, 2007.
Sharper Image stopped honoring store gift cards after filing for bankruptcy.
A hearing on Prohov's request has been scheduled for Aug. 20.
TSIC, a San Francisco-based specialty retailer, filed for bankruptcy on Feb. 19 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 08-10322.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.