Wet Seal granted initial approval of Chapter 11 case dismissal request

By Caroline Salls

Pittsburgh, March 19 –Wet Seal, LLC secured an initial order Tuesday for the dismissal of its Chapter 11 bankruptcy cases, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

Specifically, the court said Wet Seal may request entry of the dismissal order following the payment of U.S. Trustee’s fees, the filing of all monthly operating reports and the establishment of a $50,000 professional fee escrow.

If necessary, a hearing will be held on April 25 for the resolution of any fee application disputes.

“The avoidance actions and other disposition efforts undertaken by the debtors to maximize the value of their estates have all concluded, and the senior agent has exhausted its means to recoveries authorized under the court’s final cash collateral order,” the motion said.

Wet Seal said it has no remaining assets to administer or monetize for the benefit of the estates’ creditors, and senior lenders will be owed at least $500,000 on account of their pre-bankruptcy claim.

“Because there is no reasonable prospect of distributions to other creditors, and the debtors do not and will not have available funds to satisfy any unsecured claims in these cases, the debtors seek dismissal of the Chapter 11 cases.”

Wet Seal, a Foothill Ranch, Calif. clothing retailer, filed for bankruptcy on Feb. 2, 2017. The Chapter 11 case number is 17-10229.

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