Breuners Home Furnishings Chapter 11 case converted to Chapter 7 liquidation

New York, Feb. 8 - Breuners Home Furnishings Corp.'s Chapter 11 bankruptcy reorganization was converted to a Chapter 7 liquidation by an order of the U.S. Bankruptcy Court for the District of Delaware on Tuesday.

The order came in response to a request from the company. Objections were overruled.

The U.S. Trustee named Montague Claybrook as interim trustee for the case.

Breuners had asked to convert the case on Jan. 28 because it has not been able to reach agreement with its lenders over a four month budget for 2005.

"While the debtors believe the bankruptcy cases could be most efficiently and economically wound down in the context of Chapter 11, the lenders apparently concluded otherwise," Breuners said in a court filing. "As a result the debtors were left with no alternative but to file the motion to convert" to Chapter 7.

Breuners noted that it has already liquidated substantially all its assets with court approval.

In addition, it no longer has funds to pay salaries and has terminated all its remaining employees.

The official committee of unsecured creditors had opposed the conversion, asking the court to order the company and banks to negotiate in good faith.

Lancaster, Pa.-based Breuners, formerly a furniture retailer, filed for bankruptcy on July 14, 2004. Its case number is 04-12030.

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