Sport Chalet continues to wind down its business and today sent a reminder to customers to use their gift card balances, pick up equipment that is being repaired in stores and return rental equipment by April 29.
Sport Chalet is shutting down all of its 47 stores and parent company Vestis Retail Group has just started bankruptcy proceedings. Store closing sales should continue for a few weeks.
In the bankruptcy case, the Committee of Unsecured Creditors was named this week and includes:
- Nike
- Under Armour
- Wolverine Worldwide
- Levi Strauss & Co.
- VF Outdoor
- Regency Centers
- CVS Pharmacy
According to the Federal Judicial Center, creditors have a more active role in a Chapter 11 case than in other bankruptcy cases.
The official unsecured creditors’ committee, which is appointed by the U.S. trustee and made up of the seven largest unsecured creditors of the debtor who are willing to serve, monitors the progress of the case.
The holder of an unsecured claim in a bankruptcy case can’t look to any specific property of the debtor for payment.
So the committee negotiates with the debtor to develop a plan that will protect the interests of unsecured creditors, according to the Federal Judicial Center.
Because there is no case trustee in a Chapter 11 case, the committee has the authority to perform investigative functions, such as reviewing the debtor’s assets, liabilities, and financial conduct to determine its ability to continue in business.
In layman’s terms, the committee acts in an adversarial role during the process with the goal of getting the debtor and its backers to pay more money to unsecured creditors.
The committee also typically scrutinizes the debtor-in-possession financing agreement and sometimes looks to see if any preferential payments were made to creditors before the bankruptcy filing.
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