U.S. Trustee for Kid Brands asks court to convert cases to Chapter 7

By Caroline Salls

Pittsburgh, Sept. 21 – The U.S. Trustee overseeing Kid Brands, Inc.’s Chapter 11 cases asked the U.S. Bankruptcy Court for the District of New Jersey to convert the cases to Chapter 7, according to a motion filed Thursday.

Although they filed for bankruptcy on June 18, 2014, acting Region 3 U.S. trustee Andrew R. Vara said “a review of the docket in this case indicates that, as of the filing of this motion, the debtors have only filed monthly operating reports through and including the month of April 2017.”

In addition, Vara said Kid Brands has not filed any disclosure statement or plan of reorganization during its bankruptcy proceedings.

Vara said conversion would result in the appointment of an independent trustee who would liquidate any remaining assets, investigate whether there are any outstanding recoveries to pursue and disburse any remaining cash.

According to the motion, a $50,000 wind-down amount provided in the company’s final financing order should be used and that “the best course for these cases is conversion to Chapter 7.”

As an alternative to conversion, Vara suggested that the cases be dismissed.

A hearing is scheduled for Nov. 6.

Kid Brands, an East Rutherford, N.J.-based designer, importer, marketer and distributor of infant and juvenile consumer products, filed for bankruptcy on June 18, 2014. The Chapter 11 case number is 14-22582.

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