Former Townsends eyes conversion of bankruptcy case to Chapter 7

By Lisa Kerner

Charlotte, N.C., Aug. 29 - The TW Liquidation Corp. debtors and debtors-in-possession want to convert their bankruptcy cases to Chapter 7 from Chapter 11, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

A hearing is set for Sept. 14.

Following the distribution of the proceeds from the asset sales and the 503(b)(9) claims fund, the debtors remaining assets would not provide a meaningful return to unsecured creditors.

If the case does not convert, the company doubts it can pay administrative expenses as they come due, the filing said.

TW Liquidation was formerly Townsends, Inc., a Georgetown, Del.-based poultry processor that filed for bankruptcy on Dec. 19, 2010. Its Chapter 11 case number is 10-14092.

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