| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers C > Headlines for Cache, Inc. > News item |
Cache U.S. Trustee seeks case conversion, cites health plan issues
By Caroline Salls
Pittsburgh, Aug. 6 – The U.S. Trustee for Cache, Inc.’s Chapter 11 bankruptcy case asked the U.S. Bankruptcy Court for the District of Delaware to convert the case to Chapter 7, according to a motion filed Thursday.
Acting Region 3 U.S. trustee Andrew R. Vara said Cache “rallied” after its official committee of unsecured creditors filed a previous motion for case conversion by striking a deal with lender Salus Capital Partners to provide a wind-down budget.
“Unfortunately, the wind-down budget, while sufficient to pay professional fees, is apparently insufficient to fund Cache’s pre-termination obligations under its self-funded health insurance plan,” Vara said in the motion.
As a result, the U.S. Trustee said 840 former employees of Cache, whose medical plan contributions were withheld from their paychecks, are facing responsibility for medical bills that were covered under Cache’s self-insured medical plan.
“To add insult to injury, Cache went one step further in harming its former employees by deducting medical insurance payments from these employees’ final paychecks – and then failed to turn these insurance payments over to its insurance administrator,” Vara said in the motion.
“Cache has now demonstrated that it cannot manage its own bankruptcy cases, and it has now further demonstrated that its professionals, officers and lender cannot be depended upon to hold, account for, and pay administrative expenses without converting employee trust fund monies for Cache’s own use.”
The U.S. Trustee requested an Aug. 18 hearing.
Cache, a mall-based chain retailer of formal womenswear based in New York, filed for bankruptcy on Feb. 4, 2015. The Chapter 11 case number is 15-10172.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.