Buyk’s Chapter 11 bankruptcy case converted to Chapter 7

By Sarah Lizee

Olympia, Wash., Oct. 31 – Buyk Corp.’s Chapter 11 bankruptcy case was converted to Chapter 7, according to an order filed Monday with U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, William K. Harrington, the U.S. trustee for Region 2, had filed a motion seeking the conversion.

The U.S. trustee said there is no longer any business to reorganize and therefore the only question is whether the liquidation is best accomplished in Chapter 11 or Chapter 7, where an experienced independent fiduciary can liquidate the assets, determine if there are any actions to be pursued, and distribute the proceeds to creditors.

“The clear answer is that the case should be converted to Chapter 7,” Harrington said.

The U.S. trustee said that the debtor, under the direction of its three employees working for an aggregate monthly salary of about $75,000, has not only made a number of questionable decisions, but has failed to supervise hired professionals resulting in additional costs to the estate with little or no benefit for creditors.

“For example, although the debtor commenced this case with the intention of selling various equipment and inventory for the benefit of creditors on an expedited basis, approximately five months have passed, and the debtor still has not accomplish that goal,” Harrington said.

“The debtor failed to supervise the auctioneers that it hired and as a result, the auctioneers have not been made to account for – let alone turn over – auction proceeds.”

Harrington said the debtor seeks to enter into an agreement with a liquidator, but admits that there is a potential risk that there will be double commissions paid with respect to some of the items to be sold as a result of a previous agreement with an auctioneer.

Also, although the debtor filed schedules and monthly operating reports, the “global notes” annexed to those schedules and operating reports indicate that the financial information contained in those documents is “essentially worthless in that it cannot be relied upon.”

The debtor also let its workers compensation and employers liability insurance policy expire toward the end of June.

“In sum, there is simply no need to incur the cost of a plan confirmation process under the direction of the debtor when it is clear that the debtor is not able to manage its own financial affairs in a manner that would inure to the benefit of itself – let alone the creditors of the estate,” Harrington said.

Buyk is a New York-based grocery delivery service. The company filed bankruptcy on March 17, 2022 under Chapter 11 case number 22-10328.

© 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.