Stream TV’s case should be dismissed or converted, U.S. trustee says

By Sarah Lizee

Olympia, Wash., March 25 – The U.S. trustee overseeing Stream TV Networks, Inc.’s Chapter 11 bankruptcy case said the case should be dismissed or converted to Chapter 7, according to a motion filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

“Displeased with a state court order enjoining the debtor from asserting ownership over its assets, the debtor appears to have filed this Chapter 11 case solely to reap to the benefit of the automatic stay, to gain a tactical advantage, and to collaterally attack the state court order confirming the validity an agreement whereby the debtor agreed to transfer all its assets to its secured creditors in lieu of foreclosure,” Regions 3 and 9 U.S. trustee Andrew R. Vara said.

“The debtor, therefore, filed this case in bad faith under section 1112(b) of the code, warranting dismissal of this case.”

Alternatively, conversion to a Chapter 7 proceeding may be appropriate in the event the court determines that the debtor retains ownership over significant assets which can be liquidated, and which are not otherwise contemplated in the asset transfer agreement, Vara said.

A hearing is scheduled for April 15.

Stream TV Networks is a Philadelphia-based developer and retailer of 3D televisions, tablets and other personal electronics. The company filed bankruptcy on Feb. 24 under Chapter 11 case number 21-10433.

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