Local Corporation filed with the U.S. Bankruptcy Court a motion for an order (1) authorizing the Debtor to distribute funds to creditors and (2) dismissing the Chapter 11 case.
The motion explains, “The Debtor with Court approval sold substantially all of its assets on or about December 1, 2015. Since then, the Debtor has (i) resolved all claim objections; (ii) collected more than $2.8 million of cash on account of receivables excluded from the sale of the Debtor’s assets; and (iii) commenced three preferential transfer actions. Except for certain receivables that the Debtor is still in the process of collecting, the Debtor has liquidated all assets of the estate, but still needs to resolve and/or finalize settlements of collection matters and other disputes, as well as complete the prosecution of claims held by the estate against the third parties, which could increase significantly the pool from which to pay creditors.”
The motion continues, “The Debtor is prepared to distribute a significant portion of the funds to holders of allowed claims pursuant to the priority scheme set forth in the Bankruptcy Code, and expects to distribute the balance of funds held in reserve, combined with the net proceeds realized from the prosecution of litigation claims. In order to reduce administrative expense in this case, the Debtor, with the Committee’s support, is filing this structured dismissal motion in lieu of a plan and disclosure statement. In order to comply with the Court’s order regarding case disposition, the Debtor is filing this motion by the June 15, 2016 deadline. By this motion the Debtors seek authority to pay creditors their pro rata share of cash available…and dismiss the case, effective on the date that all orders and judgments relative to the adjudication, settlement or other resolution of avoidance actions and other pending disputes become final.”
The Court scheduled a July 21, 2016 hearing on the motion. Read more bankruptcy news.
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