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Former Tweeter U.S. trustee denied Chapter 7 case conversion request
By Kali Hays
New York, July 7 – The U.S. Trustee for TWTR, Inc., formerly Tweeter Home Entertainment Corp., was denied a request that the company’s Chapter 11 bankruptcy case be converted to a Chapter 7 bankruptcy case, according to a Monday order with the U.S. Bankruptcy Court for the District of Delaware.
As previously reported, Region 3 U.S. trustee Roberta A. DeAngelis said that the company sold substantially all of its assets and liquidated any remaining assets by mid-2012 and followed with a Chapter 11 plan of liquidation and disclosure statement in September 2012, which have yet to be put forth for court confirmation or approval, according to the motion.
The company advised the Office of the U.S. Trustee that it is unable to pursue plan confirmation because outstanding administrative and priority claims exceed the assets in the estate.
DeAngelis said ongoing administrative expenses continue to erode the debtors’ estates. Through Jan. 31, the TWTR debtors have paid more than $9.95 million in professional fees.
“There is no evidence to suggest that the debtors will ever be able to secure enough reductions of administrative and priority claims to make their plan feasible; to the contrary, it appears that ongoing administrative expenses are exhausting the estates’ remaining assets and making confirmation impossible,” the motion stated.
According to the order, if the company fails to seek approval of a disclosure statement by Aug. 25 the Trustee may file a new conversion motion with the court.
Tweeter, a Canton, Mass., consumer electronics retailer, filed for bankruptcy on June 11, 2007. Its Chapter 11 case number is 07-10787.
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