H2-Brands seeks conversion of Chapter 11 bankruptcy case

By Sarah Lizee

Olympia, Wash., Sept. 8 – Nova Wildcat Shur-Line Holdings, Inc., doing business as H2-Brands, has asked the U.S. Bankruptcy Court for the District of Delaware to convert its Chapter 11 bankruptcy case to Chapter 7, according to a motion filed Thursday.

The debtors filed the cases in January with plans to sell all of their assets, and closed a $27.1 million sale to H2 Acquisition, LLC in March.

The net sale proceeds were remitted to the debtor-in-possession lenders, but they were not sufficient to pay the DIP lenders in full.

Since the sale closed, the debtors’ sole business operations have been to provide the purchaser with transition services required under the parties’ transition services agreement for a period of 180 days after the closing date.

The debtors’ post-close operations have been funded by the purchaser via the transition services agreement, which is currently scheduled to expire on Sept. 27.

During the post-sale closing period, the official committee of unsecured creditors has been undertaking an investigation of potential claims and causes of action on behalf of the estates, and the debtors have made multiple productions in response to document requests from the committee, the company said.

Upon conclusion of the transition services period, the debtors are required to return all remaining post-petition borrowings and cash collateral to the DIP lenders.

The debtors will have no material assets, remaining employees, business operations, revenue generating potential or ability to fund additional administrative expenses of the estates.

As such, the debtors determined that conversion is the most efficient and effective way to conclude the cases.

A hearing is scheduled for Sept. 28.

H2 Brands is a Cranbury, N.J.-based home and hardware products company. It filed bankruptcy on Jan. 29 under Chapter 11 case number 23-10114.

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