A’Gaci DIP agent Second Avenue asks court to convert Chapter 11 case

By Caroline Salls

Pittsburgh, Oct. 2 – A’Gaci, LLC debtor-in-possession financing agent Second Avenue Capital Partners, LLC asked the U.S. Bankruptcy Court for the Western District of Texas to convert A’Gaci’s Chapter 11 bankruptcy case to Chapter 7, according to a motion filed Tuesday.

Second Avenue said A’Gaci told the court at its first-day bankruptcy hearing that it would likely seek conversion or dismissal of its Chapter 11 case following the conclusion of its inventory liquidation sales.

In addition, the lender said the court asked the U.S. Trustee overseeing the case at a Sept. 25 hearing why the case should not be converted, given an admission by A’Gaci that its estate is administratively insolvent.

“The inventory liquidation sales have concluded, and, unfortunately, the debtor has made clear that the estate is administratively insolvent,” the motion said.

“Second Avenue respectfully submits that the time is ripe, and cause exists, to convert the case to one under Chapter 7.”

Second Avenue also said A’Gaci has mismanaged its estate, failed to comply with one or more court orders and failed to pay taxes that have come due after the bankruptcy filing date.

A’Gaci is a San Antonio-based fashion retailer. The company filed bankruptcy on Aug. 7 under Chapter 11 case number 19-51919.

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