San Jose Bankruptcy Attorney Discusses Maiden Mills Wants To Convert Bankruptcy Filing From Chapter 11 To Chapter 7
San Jose Bankruptcy Attorney Discusses Maiden Mills Wants To Convert Bankruptcy Filing From Chapter 11 To Chapter 7
Maiden Mills Industries Inc., the maker of Polartec fleece, says that it wants to convert from Chapter 11 bankruptcy to a Chapter 7 case. This announcement comes after the textile maker’s lender, General Electric Capital Corp., and the committee of unsecured creditors failed to work out a liquidation plan under Chapter 11.
In its petition to the U.S. Bankruptcy Court in Worcester, Massachusetts, Maiden Mills said the conversion would make the winding process easier for the company. A hearing is set for March 15.
Chapter 11 cases are allowed to convert to Chapter 7 as long as the debtor is still in possession. Debtors who were involuntarily forced to declare bankruptcy are not allowed to convert their bankruptcy cases.
Last month, the textile maker won court approval to sell its assets to Chrysalis Capital Partners, a private equity firm, for $44 million. Chrysalis will run the mill under the name Polartec LLC. Proceeds from the sale will be used to settle remaining costs from the Chapter 11 case and fund the conversion, the Company said.
Maiden Mills had filed for Chapter 11 Bankruptcy on January 10.
A conversion in bankruptcy is where a bankruptcy case is converted from one chapter to another chapter. A debtor can convert a Chapter 11 case to a Chapter 7 case as long as the case was involuntary and a trustee has not already been appointed.
A court may elect to convert the case from Chapter 11 to Chapter 7 or dismiss the Chapter 11 case—whichever is in the best interest of the estate and its creditors. Dismissal of a Chapter 11 case does not prevent discharge of the debts in the case from dismissed in a later case under Chapter 11. Debtors are also not prevented from filing another petition. Converting a case does not change the bankruptcy filing date or the automatic stay.
Sagaria Law, P.C. represents clients in Monterey County, Santa Clara County, and Alameda County in Chapter 11, Chapter 7, and Chapter 13 bankruptcy claims. We can also help you petition to convert your bankruptcy case if necessary. Many of our client come from the Northern California cities of Carmel, Oakland, San Jose, Berkeley, Emeryville, as well as the surrounding areas. Contact Sagaria Law, P.C. today for your free consultation.
Malden Mills seeks to convert bankruptcy case to Chapter 7 liquidation, Boston Herald, March 8, 2007
Bankruptcy: Conversion and Dismissal, Lawdog.com
Related Web Resource:
Bankruptcy, Cornell Law School
