The U.S. Bankruptcy Court approved the motion of the U.S. Trustee assigned to the Small Business Development Group case to dismiss the Chapter 11 reorganization, or, in the alternative, convert it to a liquidation under Chapter 7.
The order states, “The Debtor may file with the Court, within thirty (30) days from the date of the Hearing, or by no later than July 5, 2016 (the ‘Deadline’), an amended disclosure statement and an amended chapter 11 plan (together, the ‘Amended Disclosure Statement and Plan’). (b) If the Amended Disclosure Statement and Plan contemplates that a third party (related or unrelated) will gift, invest, contribute, loan, finance or otherwise provide all or any portion of the funds or means to perform the plan (‘Third Party Financing’), the Debtor must include as exhibits to the Amended Disclosure Statement and Plan written commitments (which may be conditional) evidencing the commitment and terms of any such Third Party Financing. (c) If the Debtor fails to file with the Court the Amended Disclosure Statement and Plan by the Deadline or if the Debtor fails to include written evidence of the Third Party Financing, the Court, without further notice to the parties, shall convert or dismiss this chapter 11 case, whichever the Court determines based on the evidence presented at the Hearing is in the best interests of the creditors and the estate.”
The ruling continues, “If the Debtor timely files with the Court the Amended Disclosure Statement and Plan, accompanied by any required written evidence of Third Party Financing, the Court will hold a status conference in this case on Tuesday, July 19, 2016 at 10:00 a.m. (the ‘Status Conference’). At the Status Conference, the Court will determine whether the terms of the Third Party Financing are adequate and/or sufficient in detail to enable the Debtor to move forward with the prosecution of the Amended Disclosure Statement and Plan. If the Court determines that the terms of the Third Party Financing are inadequate and/or lack sufficient detail, the Court shall immediately dismiss or convert the Debtor’s chapter 11 case, whichever is in the best interests of the creditors and the estate.”
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