Scovill trustee, creditor group ask court to convert case to Chapter 7

By Caroline Salls

Pittsburgh, July 1 - Scovill Fasteners Inc.'s Chapter 11 trustee and official committee of unsecured creditors have asked the U.S. Bankruptcy Court for the Northern District of Georgia to convert the company's case to Chapter 7 for liquidation, according to a Thursday court filing.

The trustee and committee said they asked the court to convert the case because of the "mounting and already substantial cost of administration of these estates in Chapter 11, the absence of an operation business of the debtors" and because conversion is in the best interest of the company and its creditors.

In addition, the creditor group and trustee said conversion would minimize expenses and ensure a maximum recovery, and the trustee would be able to reject "burdensome executory contracts" under Chapter 7.

The company also has no reasonable chance of rehabilitating or confirming a Chapter 11 plan, the motion said.

According to the motion, the sale of substantially all of Scovill's assets closed on June 24. The estates' remaining assets include causes of action and some funds necessary to administer the case.

Scovill, a Clarksville, Ga.-based maker of snap-closure buttons for consumer and military clothing, filed for bankruptcy on April 19. The Chapter 11 case number is 11-21650.

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