Northwest interest holder’s Chapter 11 case dismissal motion denied

By Caroline Salls

Pittsburgh, May 1 – A motion filed by the Northwest Co. interest holder Extreme Horse Ltd. asking the U.S. Bankruptcy Court for the Southern District of New York to dismiss Northwest’s Chapter 11 case was denied Friday.

“The filing of the bankruptcy case of Northwest was unauthorized under North Carolina law, and was thus a nullity,” the motion said.

Extreme Horse said it has a contentious relationship with Northwest manager Ross Auerbach, who authorized the bankruptcy filing, “due largely to Auerbach’s repeated misconduct both with regard to Northwest (misconduct that, if this case is not dismissed, will likely result in a motion for the appointment of a trustee to oversee these cases) and with regard to his other business venture with Extreme Horse.”

However, Extreme Horse said that relationship is not relevant to the dismissal request. Instead, Extreme Horse said the question is whether Auerbach needed to obtain the consent of Extreme Horse to file the Chapter 11 petition on behalf of Northwest.

“The answer is yes,” the motion said. “The consent of Extreme Horse was required for any bankruptcy filing on behalf of Northwest to be valid.”

Judge Michael E. Wiles said in Friday’s ruling that Auerbach acted within his power as manager in signing the petition and that “the bankruptcy petition was duly authorized.”

Northwest is a Roslyn, N.Y.-based branded home textiles company. The company filed bankruptcy on April 18 under Chapter 11 case number 20-10990.

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