Happy Kids' Chapter 11 case dismissed following asset sale

By Caroline Salls

Pittsburgh, July 13 - Happy Kids, Inc.'s Chapter 11 case was dismissed Thursday by the U.S. Bankruptcy Court for the Southern District of New York following the sale of its Wear Me Apparel Corp. assets.

According to the company's motion to dismiss the case, although the sale resulted in payment in full of Happy Kids' debtor-in-possession lender's secured claims, there are not sufficient funds or assets remaining to pay the claims of its junior pre-bankruptcy lender or to pay the remaining administrative claims in its Chapter 11 case.

"Given the state of the [company's] Chapter 11 cases, there will be no other distributions made to creditors and therefore no need for a Chapter 11 plan and no funds available to present and confirm a Chapter 11 plan," Happy Kids said in the motion.

Happy Kids is a New York-based designer and marketer of children's apparel. Declining sales and being overleveraged for several years led Happy Kids to file for bankruptcy on Jan. 4, 2005. Its Chapter 11 case number is 05-10016.

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