Posted: Sep 19, 2012 8:50 AM by Dennis Bragg - MTN News
BUTTE- One of the largest creditors in the Vann's bankruptcy case is asking a federal judge to convert the case to Chapter 7 bankruptcy, arguing the court should move toward liquidating the company.
Missoula-based Vann's filed for a Chapter 11 bankruptcy re-organization earlier this summer, taking the longer approach to addressing its debt as the retailer tries to re-group in the face of a softer economy and electronics market.
However, now one of the largest creditors in the case, GE Commercial Distribution Finance, has filed a motion asking the Montana Bankruptcy court to convert the case to Chapter 7, which might open the door for liquidation under the control of a court-appointed trustee.
In court documents, GE Commercial says its concerned about Vann's "cash on hand" going into the critical holiday shopping season, pointing to Vann's own statements to the court projecting a negative cash flow.
However, such a motion is a fairly regular occurrence in Chapter 11 bankruptcy cases. Vann's CEO Jerry McConnell said there are "no surprises" in GE Commercial's motion.
Bankruptcy Judge John Peterson refused to hear GE Commercial's Emergency Motion to convert the case Wednesday, saying it didn't give Vann's enough time to respond. But he did schedule the hearing for Sept. 26 in Missoula.