Northwest Co.’s Chapter 7 trustee seeks approval of $4.3 million settlement

By Sarah Lizee

Olympia, Wash., Jan. 20 – Northwest Co., LLC’s Chapter 7 trustee is seeking approval of a settlement that would bring in $4.3 million to the debtor’s estate, according to a motion filed Thursday with the U.S. Bankruptcy Court for the Southern District of New York.

The settlement is with the company’s former chief executive officer, Ross Auerbach, and Northwest Textile Holdings LLC.

The settlement resolves multiple direct claims against and involving Auerbach and his personal use of company assets.

In addition to the $4.3 million settlement consideration, about $2.2 million of claims asserted against the debtor’s estate will be withdrawn.

The parties will exchange mutual releases as part of the settlement as well.

The trustee said the settlement is an instrumental step toward completing his administration of the debtors’ estates and the closing of the Chapter 7 cases.

A hearing on approval of the settlement is scheduled for Feb. 21.

Northwest is a Roslyn, N.Y.-based branded home textiles company. The company filed bankruptcy on April 18, 2020 under Chapter 11 case number 20-10990. The case was converted to Chapter 7 on Nov. 20, 2020.

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