KB US shareholder requests dismissal of Chapter 11 bankruptcy cases

By Caroline Salls

Pittsburgh, Sept. 8 – KB US Holdings, Inc. ultimate parent GSSG Capital Corp. is asking the U.S. Bankruptcy Court for the Southern District of New York to dismiss KB’s Chapter 11 cases, according to a motion filed Friday.

The motion said KB US Holdings is a wholly owned subsidiary of non-debtor KB Group Holdings, Inc., which in turn is a wholly owned subsidiary of GSSG.

According to the motion, “the debtors did not and could not have obtained the requisite authorization” from their respective governing bodies to file the Chapter 11 cases.

Specifically, GSSG said five directors must be present to constitute a quorum to act on the company’s behalf, but KB US’s board only includes three directors and has five vacancies.

“Vacancies are irrelevant in determining a quorum, and the quorum for [KB US’s] board of directors remains five,” the motion said.

In addition, GSSG said the company’s proposed asset purchase agreement was not properly authorized by the board, nor were shareholders GSSG or KB Group’s approval sought or obtained.

“The debtors cannot use the bankruptcy process to bypass the rights afforded to GSSG and KB Group under applicable law,” the motion said.

As a result, GSSG asked the court to dismiss the cases and declare the asset purchase agreement to be void.

KB is a Parsippany, N.J.-based operation of food retail stores. The company filed bankruptcy on Aug. 23 under Chapter 11 case number 20-22962.

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