MC Sports U.S. Trustee seeks conversion of Chapter 11 bankruptcy case

By Caroline Salls

Pittsburgh, May 30 – The U.S. Trustee overseeing the bankruptcy case of Michigan Sporting Goods Distributors, Inc., which does business as MC Sports, asked the U.S. Bankruptcy Court for the Western District of Michigan to convert the company’s Chapter 11 case to Chapter 7, according to a motion filed Tuesday.

As an alternative to conversion, the U.S. Trustee said the case could be dismissed entirely.

“Although the debtor hoped to have time to manage the conclusion of the liquidation of its assets, it is running out of resources,” Region 9 U.S. trustee Daniel M. McDermott said in the motion.

“As a result, the time has come to convert the case to Chapter 7.”

McDermott said MC Sports’ wind-down budgets and monthly operating reports show significant losses.

“The debtor is trying to manage its budget forecasts to keep the bottom line positive,” the motion said “However, the trend line downward is unmistakable.”

In addition, the U.S. Trustee said the range of sale prices for any sale of the company’s intellectual property is too small to rectify the company’s administrative insolvency issue, and, because substantially all of MC Sports’ assets have been sold, there is no likelihood of rehabilitation.

McDermott said the case should be converted to preserve any chance for unsecured creditors to receive a distribution.

The Grand Rapids, Mich.-based sporting goods retailer filed bankruptcy on Feb. 14 under Chapter 11 case number 17-00612.

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