The U.S. Trustee assigned to the T3M case filed with the U.S. Bankruptcy Court a motion to convert the Chapter 11 reorganization case to a liquidation under Chapter 7.
The motion explains, “T3M has exhausted its financing. On August 21, 2017, its primary creditor terminated T3M’s access to cash collateral. That same day, T3M withdrew its DIP financing motion, self-described as its ‘only real opportunity to meet its various and urgent financing needs. T3M began its bankruptcy case with $7,163.51 of cash and $399,089.38 in accounts receivable, nearly 80% of which were aged past 120 days. T3M has drained these liquid assets nearly entirely, having operated at net monthly losses of $72,656.63 in July 2017, and $158,348.01 in June 2017. T3M has neither the liquid assets nor the profit margin to reorganize. With continuing operating losses, the value of its remaining assets will diminish further.”
In addition, “Without capital, T3M will likely incur post-petition administrative wage claims, be unable to maintain appropriate insurance, or afford security for its inventory. Additionally, T3M is delinquent on its quarterly fees. The Court should convert the bankruptcy case to Chapter 7 and allow a trustee to administer T3M’s remaining assets.” Separately, Lender Collections also filed a motion seeking to convert or dismiss the case. The Court scheduled a September 14, 2017 hearing to consider the conversion.
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