Sturgis U.S. Trustee asks court to convert bankruptcy case to Chapter 7

By Caroline Salls

Pittsburgh, March 4 - Sturgis Iron & Metal Co., Inc.'s U.S. Trustee asked the U.S. Bankruptcy Court for the Western District of Michigan to convert the company's Chapter 11 bankruptcy case to Chapter 7, used for liquidation, according to a Wednesday court filing.

According to the motion filed by Region 9 U.S. trustee Daniel M. McDermott, Sturgis has sold substantially all of its assets, made distributions on secured claims and begun winding down its remaining business operations.

In addition, McDermott said the company has no reasonable likelihood for rehabilitation, and various objections to confirmation of its plan of liquidation are unresolved.

The U.S. Trustee said administering a Chapter 7 case would also be cheaper.

Sturgis, a Sturgis, Mich., scrap metal recycling company, filed for bankruptcy on April 4, 2008. Its Chapter 11 case number is 08-02966.

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