Former Townsends converted to Chapter 7 from Chapter 11 bankruptcy

By Jim Witters

Wilmington, Del., Oct. 4 - The request by TW Liquidation Corp.'s debtors and debtors-in-possession to convert the Chapter 11 bankruptcy case to Chapter 7 was granted on Tuesday, according to documents filed in the U.S. Bankruptcy Court for the District of Delaware.

TW Liquidation is formerly Townsends, Inc.

Judge Christopher S. Sontchi ordered that the case will convert to Chapter 7 as of 4 p.m. ET on Oct. 13. Until a permanent trustee is appointed, all contested matters in the case are stayed.

On or before Oct. 7, the debtors are to pay the secured lenders $311,700 in residual funds, which includes excess funds in the 503(b)(9) claims fund.

The debtors and debtors-in-possession requested the conversion in August, stating that following the distribution of proceeds from the asset sales and the 503(b)(9) claims fund, the debtors remaining assets would not provide a meaningful return to unsecured creditors.

TW Liquidation was formerly Townsends, Inc., a Georgetown, Del.-based poultry processor that filed for bankruptcy on Dec. 19, 2010. Its Chapter 11 case number is 10-14092.

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