MC Sports unsecured creditors committee opposes 401(k) match payment

By Caroline Salls

Pittsburgh, May 12 – Michigan Sporting Goods Distributors, Inc.’s official committee of unsecured creditors objected to the payment of a $150,000 company 401(k) match to employees, according to a Friday filing with the U.S. Bankruptcy Court for the Western District of Michigan.

Michigan Sporting Goods does business as MC Sports.

“Going-out-of- business sales have recently ended, and the debtor has minimal ongoing operations,” the committee said in the objection.

“Given the debtor’s limited resources and non-operating status, payment of prepetition claims would be inappropriate.”

The committee also said the 401(k) match does not preserve the value of the company’s estates and is not necessary to maintain the morale of employees, most of whom have been terminated.

In addition, the creditor group said the sale of the MC Sports assets did not produce the projected recovery, meaning the company cannot prove that its estate assets are likely to be sufficient to pay higher priority claims in full.

The Grand Rapids, Mich.-based sporting goods retailer filed bankruptcy on Feb. 14 under Chapter 11 case number 17-00612.

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