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Reference7 | 311 comments | Create New Account
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Reference7
Authored by: Gringo_ on Tuesday, August 07 2012 @ 09:32 AM EDT

It is basically a case of Cahn going to jail for trading while insolvent (as would a normal company director) if he carries on in Chapter 11, when the company is insolvent.

What do you mean "if" he carries on while the company is insolvent. He is already guilty of that. The company has been insolvent for at least the last 3 months...

In the May 2012 monthly operating report, filed on August 1 2012, the Debtors’ estates report $3,721,181.00 in unpaid postpetition debts and only $145,352.00 cash on hand. Additionally, there is no reasonable chance of “rehabilitation” in these cases as the Debtors’ estates have already sold substantially all of their assets and have no continuing business operations. Furthermore, the only reasonable opportunity for the Debtors’ estates to be in a position to pay outstanding administrative expenses and to potentially make a distribution to general unsecured creditors hinges upon a successful outcome in the District Court Action. A chapter 7 trustee would be in a better position to eliminate administrative expenses going forward while awaiting an outcome with respect to the District Court Action.

How do they plan to "eliminate administrative expenses"? Get the government to pay their costs to pursue the litigation somehow? (Though Boise Schiller is obligated to continue the litigation, SCO is still required to pay incidental court room fees.)

[ Reply to This | Parent | # ]

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