Product Quest Manufacturing Chapter 7 trustee provides case update

By Sarah Lizee

Olympia, Wash., April 6 – Product Quest Manufacturing, LLC Chapter 7 trustee C. Edwin Allman III gave a report on the status of the company’s bankruptcy case in court documents filed Wednesday with the U.S. Bankruptcy Court for the Western District of North Carolina.

Allman said his court-appointed special counsel, ASK, LLC, has concluded the settlements of all preference claims on behalf of the estate. The trustee and ASK are now analyzing the likelihood of collecting on judgments obtained in a few of the related adversary proceedings.

The trustee said he has accomplished the collection of settlement funds for fraudulent conveyance/breach of duty adversary proceedings against former owners, managers, officers and fiduciaries this quarter.

“It remains unclear whether there will be funds available for the payment of claims other than the secured and possible super priority claim of Madison Capital,” Allman said in the report.

“That determination has been delayed until the conclusion of Madison's pending reps and warranties litigation.”

Madison's arbitration hearing was conducted and a ruling from the arbitration panel may come in June or July, but variables exist that could impact the timing, the trustee said.

Allman said he has been working toward a resolution of the WARN ACT litigation and has been carefully analyzing and summarizing employee claims.

“A successful resolution of that adversary proceeding will allow for the closure of the related cases other than Ei LLC and will establish the universe of priority wage claims,” Allman said.

The trustee said he expects to resolve the adversary in the upcoming quarter.

Holly Hill, Fla.-based Product Quest manufactures primarily over-the-counter drugs and cosmetics, as well as some prescription drugs and animal health products. The company filed bankruptcy on Sept. 7, 2018 under Chapter 11 case number 18-50946.

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