Old tyme pottery5/9/2023 (Of note, the consultant is affiliated with the proposed DIP financing company.) Also for hearing on this same day will be the motion to close four stores and engage a consultant to manage the closures and sales. The next big event in the case will be a further hearing on OTP’s motion for DIP financing, with the hearing set for Jby Zoom. ![]() OTP filed a number of first day motions, which were heard on July 1, 2020, and were granted on an interim basis. OTP filed their voluntary Chapter 11 case on June 28, 2020. Creditors will want to investigate the value of the collateral and whether PNC is oversecured.Ĭommencement and Status of Bankruptcy Case If true, and if the $50 million valuation of assets were to hold up, then PNC would be an “oversecured” creditor, meaning its loan amount would be less than the value of its collateral. PNC is allegedly secured in all or substantially all of the company’s assets, including inventory, cash, accounts, and receivables. The loan amount is approximately $28.2 million. OTP’s pre-bankruptcy loan was with PNC Bank. OTP states that its inventory (at cost), receivables, and cash total approximately $50 million. Instead, its assets consist of inventory, receivables, and cash. OTP leases its locations from landlords, so it does not have any real estate assets. OTP attributes the store closings, and the need to file the bankruptcy case, to the impact of COVID-19 on retail sales. ![]() Upon filing the bankruptcy cases, OTP proposed to close 4 of their 43 stores at the start of the case, with further potential closures to follow. Old Time Pottery Holdings has no assets beyond its membership interest in the operating entity. Old Time Pottery, LLC is the operating entity, and is solely owned by the other debtor (Old Time Pottery Holdings, LLC). As of the bankruptcy, OTP employed 800 full- and part-time employees, most of whom are paid hourly and work in the retail stores. Before bankruptcy, it operated 43 locations in 11 states. OTP is a discount home décor retailer based in Murfreesboro, Tennessee. The declaration is a lengthy description of the OTP’s version of why they had to file bankruptcy and what they would like to accomplish in bankruptcy court. The declaration can be found at Docket #19 and is a “must read” document. OTP filed the Declaration of Jonathon Tyburski, the OTP’s CFO, on the first day of these bankruptcy cases. We expect much of these bankruptcy cases to revolve around the lease renegotiations. ![]() As of the current bankruptcy filing, PNC was owed $28.2 million. Financing for the transaction was provided by PNC Bank (which remained OTP’s bank until just before the bankruptcy). In 2014, OTP was acquired by Comvest Investment Partners, an investment fund based in New York. Unsecured creditors were paid 75% on their allowed claims, an unusually high-percentage payout for bankruptcy cases. OTP successfully reorganized in the prior case with a new $20 million loan from First Merit Bank in Akron, Ohio. Prior to that case, its then-bank (SunTrust) reduced its line of credit from $40 million to $18 million, and then refused advances on the line entirely, forcing the company into bankruptcy. The prior case was caused by the 2008 recession, echoing the circumstances alleged to be behind the current case. It previously filed in August 2009 and had a plan confirmed in May 2010. ![]() This is OTP’s second trip through bankruptcy court. We expect much of these cases to revolve around these lease renegotiations. However, landlords have extensive rights under the Bankruptcy Code too. Bankruptcy Code gives a company wide powers to “assume” or “reject” commercial leases. While the bankruptcy cases are still in their early days, it looks like the main goal is to renegotiate their store leases to increase profitability. Bankruptcy Code in Nashville on June 28, 2020. Discount home décor retailer Old Time Pottery and its holding company filed for protection under Chapter 11 of the U.S.
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