Medly asks court to convert its bankruptcy case to Chapter 7

By Sarah Lizee

Olympia, Wash., March 30 – Medly Health Inc. wants to convert its Chapter 11 bankruptcy case to Chapter 7, according to a motion filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

After starting the Chapter 11 process, the debtors marketed and sold substantially all of their assets.

Medly said that since the closing of these sales, the debtors’ efforts have been focused on evaluating the potential for a consensual plan of liquidation with their key stakeholders, rejecting burdensome executory contracts and nonresidential real property leases, and winding down the remaining businesses of the debtors.

The debtors have determined that a plan of liquidation in these Chapter 11 cases is not feasible in light of their estimate of administrative and priority claims, the value of their remaining assets, the limited prospect of future recoveries to the estates, and the lack of cash to fund a further wind down, Medly said.

A hearing is scheduled for April 25.

The Boulder, Colo.-based pharmacy company filed Chapter 11 bankruptcy on Dec. 9 under case number 22-11257.

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