Tuesday Morning has chosen to convert its Chapter 11 bankruptcy filing to a Chapter 7 status and is going out of business.
The company filed for Chapter 11 bankruptcy protection in February.
In a court filing with the United Bankruptcy Court for Northern District of Texas, Fort Worth division on June 30, Tuesday Morning and parties involved in the Chapter 11 proceeding filled a motion to convert to Chapter 7 bankruptcy.
The filing maintained:
- The debtors have sold substantially all of their assets. Secured creditors hold competing, unresolved liens against the sale proceeds. They have filed numerous pleadings setting out their alleged entitlement to payment. Either the parties will reach a settlement, or the court will decide these disputes. But neither outcome will leave behind any sale proceeds for unsecured creditors. Meanwhile, the debtors currently have insufficient unencumbered funds to pay administrative expense claims. By July 31, 2023, the debtors believe they will have fulfilled all their obligations under the sale documents and their authority to use cash collateral will have ended. Accordingly, the Court should convert the case from chapter 11 to chapter 7 effective July 31, 2023.
The filing added that Hilco had purchased the right to designate leases for assumption and assignment in a process that will play out during July.
Already, Hilco is conducting going-out-of-business sales for Tuesday Morning, which are ongoing across the retailer’s operations. Merchandise, select fixtures, furnishings and equipment are all on sale.
Although it did not immediately post a conspicuous notice of the liquidation, tuesdaymorning.com has major discounts posted throughout. The FAQ section of the website did explain that the business was winding down. The company also posted its going out of business sale on social media along with thanks for 49 years of support. Attempts to connect with the company investor relations site failed.
