Northwest: Ashford Textiles asks court to convert cases to Chapter 7

By Sarah Lizee

Olympia, Wash., Oct. 9 – Ashford Textiles, LLC is seeking conversion of Northwest Co., LLC’s Chapter 11 cases to Chapter 7, according to a motion filed with the U.S. Bankruptcy Court for the Southern District of New York on Thursday.

As previously reported, Northwest agreed to sell its assets to Ashford Textiles and Ashford Partners LLC for $31.46 million, including $24 million in cash and $7.46 million for payment of cure costs.

“Conversion is the only appropriate remedy when creditors are faced with tactics by debtors and a creditors’ committee that repeatedly demonstrate bias and blatant disregard of the best interests of creditors,” Ashford said in its motion.

“This issue is particularly significant where the only remaining assets of the estates consist of causes of action that could significantly vary in value if not pursued in the diligent and detached manner that is required of the estates’ fiduciaries.

“Here, the record is replete with evidence of questionable alliances that may have already caused harm to the estates.”

Ashford said that while it had hoped those issues were in the past and that it could instead focus on the continued consummation of its purchase of the debtors’ assets, “recent developments have made clear that absent conversion Ashford will have to devote substantial efforts to help shepherd these cases to a conclusion that could instead be more efficiently achieved by a Chapter 7 trustee.”

Ashford added that it is “beyond dispute” that the cases have always been liquidation cases that have already achieved their primary objective – the sale of substantially all of the debtors’ assets.

“At this point, the estates consist solely of assets in the form of causes of action that can be more efficiently liquidated by a Chapter 7 trustee. There is simply no need to incur the cost of a plan confirmation process that cannot confer any benefit upon creditors that could not otherwise be obtained through conversion.”

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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.