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U.S. Trustee says Bumble Bee case should be converted, not dismissed
By Caroline Salls
Pittsburgh, Sept. 4 – The U.S. Trustee overseeing the Chapter 11 case of Old BBP, Inc., formerly Bumble Bee Parent, Inc., objected Thursday to the company’s motion for dismissal of the case, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.
U.S. Trustee Andrew R. Vara said in his objection that the case dismissal motion seeks essentially the same relief as the global settlement stipulation filed on July 9, to which Vara also objected on the grounds that the settlement constituted a plan of liquidation that lacked the required disclosure, solicitation and notice.
However, Vara said the dismissal motion goes one step farther by eliminating the possibility of a plan.
“The motion admits that the debtors do not believe they can file a confirmable Chapter 11 plan because they believe the estate may be administratively insolvent,” Vara said. “Granting the motion as prayed will dispose of the remaining estate assets while removing any ability of the estate to pay what the motion admits could be a significant administrative tax liability.”
Instead of dismissal, Vara said the case should be converted to Chapter 7 bankruptcy so a Chapter 7 trustee can administer the litigation assets which Old BBP and its official committee of unsecured creditors believe exist for the benefit of all creditors.
In addition, the U.S. Trustee said in Chapter 7, the remaining assets of the estate can be marshaled to be distributed to creditors, and the administration of claims through the provisions and procedures of the Bankruptcy Code will preserve the procedural rights of all creditors.
A hearing is scheduled for Sept. 10.
Bumble Bee is a San Diego-based shelf-stable seafood supplier. The company filed bankruptcy on Nov. 21 under Chapter 11 case number 19-12502.
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