Country Inn bankruptcy hearing tomorrow
The Country Inn’s owners, 5042 Holding Limited, have retained the firm of McNeer, Highland, McMunn & Varner, L.C. of Martinsburg as their proposed counsel for their bankruptcy case.
As reported last week, the bankruptcy filing halted a foreclosure sale by CNB Bank on Tuesday, July 17.
Under the Chapter 11 bankruptcy filing, the Inn’s owners have 120 days to come up with a plan to reorganize the business and pay creditors.
Such a plan must be approved by the U.S. Bankruptcy Court within 180 days of the July 17 filing.
A Notice of Motions and Notice of Hearings was sent to 27 of the Inn’s creditors on Thursday, July 19. A hearing is set for 9:30 a.m. on Thursday, July 26 at the U.S. Bankruptcy Court in the U.S. Federal Building, 217 West King Street, Martinsburg.
The 27 creditors named in the Inn’s filing included federal, state and local government agencies seeking a variety of taxes and fees as well as CNB Bank, American Express, two law firms, and several businesses that supplied goods and services to the Inn.
Recorded liens, which didn’t include some of these claims, totaled more than $4.4 million in April.
Counsel for the Inn has filed five procedural motions in regard to the case.
Those motions deal with:
(1) Allowing the Inn to continue to operate.
(2) Setting a deadline for people or companies to claim they are owed money.
(3) Authorizing payment of pre-bankruptcy salaries and other compensation.
(4) Continuing insurance policies and other insurance programs.
(5) Authorizing retention of McNeer, Highland, McMunn & Varner, L.C. as bankruptcy counsel.
The bankruptcy process is governed by the Federal Rules of Bankruptcy Procedure and the local rules of each bankruptcy court.
A bankruptcy filing provides a period of time in which all judgments, collection activities, foreclosures and repossessions of property are suspended and may not be pursued by the creditors on any debt or claim that arose before the filing of the bankruptcy petition.
The bankruptcy judge may decide any matter connected with a bankruptcy case and the approval or disapproval of a plan of business reorganization.
After the plan is confirmed, the debtor is required to make plan payments and is bound by the plan’s provisions.
The debtor can reduce its debts by repaying a portion of the obligations and discharging others. The debtor can also terminate burdensome contracts and leases, recover assets and rescale operations to return to profitability.
According to the Federal Court website, the U.S. trustee plays a major role in monitoring the progress of a Chapter 11 case and supervising its administration.
The trustee is responsible for monitoring the debtor in operation of the business and the submission of operating reports and fees.
Additionally, the U.S. trustee monitors applications for compensation and reimbursement by professionals, plans and disclosure statements filed with the court, and creditors’ committees.
The U.S. trustee conducts a meeting of the creditors, who may question the debtor about the debtor’s acts, property and the administration of the case.
The U.S. trustee can also impose certain requirements on the debtor, such as reporting monthly income and operating expenses, establishing new bank accounts, and paying current employee withholding and other taxes.