hhgregg’s Chapter 11 bankruptcy case dismissed by court

By Sarah Lizee

Olympia, Wash., Dec. 22 – hhgregg, Inc.’s Chapter 11 bankruptcy case was dismissed by the U.S. Bankruptcy Court for the Southern District of Indiana, according to an order filed Friday.

As previously reported, the company had tried to have its case dismissed in 2021, but the court denied the motion.

The company started the Chapter 11 process in 2017 to find a going-concern buyer for substantially all of the debtors’ assets. They were unable to find a buyer though, and subsequently liquidated their assets, including their interests in certain estate causes of action and leases for retail locations and distribution centers.

Despite this, the liquidation process did not yield proceeds sufficient to make any distributions to priority claims, or to holders of general unsecured claims.

hhgregg said the cost and administrative burden of prosecuting a plan of liquidation or converting the cases to Chapter 7 would only serve to deplete assets.

The company said dismissal would be the best option.

Based on current estimates, administrative claimants are projected to receive about 93% recovery on their allowed administrative expense claims.

The debtors sought authority to implement a two-step process intended to culminate with entry of the dismissal order.

First, the initial order will set up a procedural framework for the dismissal that would include the initial distributions, which would be equal to about 85% of each holder’s pro rata share of distributions on account of their administrative claim, and procedures for final requests for payment of professional fees.

Second, the debtors will file a final report once the initial distributions have been completed.

All remaining pro rata distributions to holders of allowed administrative claims will be completed within 180 days.

This modest delay will allow time to address and/or reconcile any returned or undeliverable distributions in connection with the initial 85% pro rata distribution to holders of allowed administrative claims, hhgregg said.

The final pro rata distributions to holders of allowed administrative claims may include proceeds, if any, if remaining de minimis assets of the estates are sold rather than abandoned.

hhgregg is an Indianapolis-based specialty retailer of consumer electronics and home appliances. The company filed for bankruptcy on March 6, 2017 under Chapter 11 case number 17-01302.

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