The U.S. Bankruptcy Court issued an order dismissing the Kid Brands Chapter 11 cases and granting related relief.
The order states, “Pursuant to sections 105(a) and 1112(b) of the Bankruptcy Code and Bankruptcy Rule 1017(a), each of the Debtors’ Chapter 11 Cases jointly administered under Case Number 14- 22582 is hereby dismissed, effective as of the later of the date of entry of this Order or December 31, 2017 (the ‘Dismissal Date’).” As previously reported, the Debtors objected to the U.S. Trustee’s (UST) motion for conversion and sought a dismissal order on the following grounds: “Although the UST asserts in the Conversion Motion that the Debtors ‘have failed to present an exit strategy from bankruptcy’ and thus conversion of these cases would be in the best interest of creditors, the Debtors disagree. As the UST is well aware, there are insufficient funds available to prosecute and confirm a plan of liquidation in the Chapter 11 Cases.”
In addition, “As the UST is also aware, all assets of these estates have already been administered and there are no other assets to be administered or liquidated. Conversion of the Chapter 11 Cases to chapter 7 would add an unnecessary layer of administrative costs. Other than the disbursement of the remaining cash held by the Debtors and held in the GUC Trust Account…that are proposed to be paid to the DIP Agent and certain Estate Professionals…there is nothing left to be done in these cases, as all viable Avoidance Actions have been prosecuted to conclusion and all of the Debtors’ other assets have already been liquidated.”
This children’s clothing designer and retailer filed for Chapter 11 protection on June 18, 2014, listing $121 million in pre-petition assets.
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