Tuesday Morning equity committee appointed for sale, plan process

By Sarah Lizee

Olympia, Wash., Oct. 5 – The U.S. Trustee overseeing Tuesday Morning Corp.’s Chapter 11 case appointed an official committee of equity security holders, according to a notice filed Monday with the U.S. Bankruptcy Court for the Northern District of Texas.

The committee members are Kevin Barnes of Devault, Pa., John H. Lewis of Osmium Partners, based in Greenbrae, Calif., Patrick Conlin of Milestone Capital Management, based in Plymouth, Minn., Alexander Keoleian of North Richland Hills, Tex., and Adam Gui of Naperville, Ill.

As previously reported, on Sept. 18 the court ordered the trustee to appoint the committee.

In August, shareholder Jeremy Blum filed a motion asking the court to order appointment of the committee. Blum said a previous motion for appointment of an equity committee was denied by the court on July 8, but that ruling “left a door open” for a renewed motion if significant new evidence could be found.

Blum said in his motion that “significant new evidence has arisen since that date proving both solvency and lack of oversight by the board of directors of Tuesday Morning.”

Specifically, Blum said despite a drawdown of inventory, Tuesday Morning’s revenues in June significantly exceeded projections.

Blum said Covid-19 is actually benefiting the company because “people forced to stay at home are buying housewares more than before.”

“Given the speed with which the debtors plan to move forward with both a plan and sale process and the level of interest that there appears to be from potential bidders for the debtors’ assets, the court believes it is necessary to appoint an equity committee at this time to ensure that equity holders are able to participate meaningfully in the sale and plan processes in a streamlined and efficient way,” the order said.

Tuesday Morning is a discount, off-price retailer based in Dallas. The company filed bankruptcy on May 27 under Chapter 11 case number 20-31476.

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