Delaware Business Bankruptcy Report : Delaware Business Bankruptcy Report : Morris James LLP Lawyers & Attorneys

Effective at 5:00 p.m. Eastern time today, the Chapter 11 cases of Joan Fabrics Corp. and Madison Avenue Designs, LLC will convert to cases under Chapter 7 of the Bankruptcy Code.  Yesterday, Judge Christopher S. Sontchi entered an order approving the debtors' motion to convert the cases.

In July, 2007, the Court approved a sale of substantially all of the debtors' assets.  Since that time, the debtors engaged in the process of winding down their remaining operations.  However, according to the debtors' motion convert the cases, the debtors' lenders did not consent to the debtors' further use of the lenders' cash collateral to administer the estates.  The debtors therefore moved to convert the cases, and the Court approved the request.

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Joan Fabrics Corporation and Madison Avenue Designs LLC filed voluntary Chapter 11 petitions on April 10, 2007 in the Bankruptcy Court for the District of Delaware.  They have been assigned case numbers 07-10479 and 07-10480, respectively.  Each petition lists between $1 million and $100 million each in assets and liabilities.  The petitions were filed by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. in Boston, Massachusetts, and by the Wilmington office of Pachulski, Stang, Ziehl Young, Jones & Weintraub LLP.  Judge Christopher S. Sontchi is presiding over these cases.

 

UPDATE: These cases converted to Chapter 7, effective November 20, 2007 at 5:00 p.m. EST.

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