August 23, 2018 – Creditors Medley Capital Corporation & Medley Opportunity Fund II filed with the Court an objection to the Debtor’s motion to extend the exclusivity period for filing a Chapter 11 Plan and Disclosure Statement [Docket No. 255]. The objection [Docket No. 308] asserts, “The Third Extension Motion should be denied. The Debtor has operated this case for the sole benefit of an insider who as the landlord for one of the Debtor’s locations, is also allegedly one of its most significant creditors. The Debtor’s insistence on pursuing an un-confirmable plan puts the entire business in jeopardy. Not only are the recoveries to creditors at risk of being impaired, but about 250 employees risk losing their jobs. Despite repeated requests, the Debtor has thus far failed to provide projections for the ongoing operation of the business that are feasible. Medley asserts that it is time for the court to allow others to step in to see if this business can be saved and value preserved for the legitimate stakeholders….No ‘unforeseeable’ event has transpired since the Petition Date. The Debtor’s Adversary Proceeding must be resolved prior to confirmation in the Debtor’s favor in order for the Plan to be feasible. However, the Debtor has stated that it will not be ready for trial until November 2019. The costs of the bankruptcy proceeding, the attendant risk of administrative insolvency, and the ongoing demise of the Debtor’s business auger against further delay and for competition. Another ninety-day extension of exclusivity (which is but a fraction of what the Debtor purports to actually need) that would bar other parties in interest from filing competing plans is not warranted, especially when a competing plan is precisely what a proceeding like this needs. Parties in interest who are bearing the risks and costs of this case should be free to explore alternative plans — plans that have prospect for success. Accordingly, a further extension of exclusivity should not be granted.”
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