On February 2, 2016, Hancock Fabrics, Inc. and 6 affiliates filed for relief under chapter 11 of the Bankruptcy Code. The cases are jointly administered under Case Number 16-10296 and presided over by Judge Shannon. The first day hearing was held on February 3, 2016. The second day hearing is scheduled for February 22, 2016 at 1:00 p.m.
The majority of the information available about the Debtors comes from the Declaration of Dennis Lyons in Support of Chapter 11 Petitions and Request for First Day Relief (D.I. 4) (the “Declaration”). On March 21, 2007, Hancock and its affiliates filed for bankruptcy for the first time. Since that time, the Debtors have experienced a challenging business environment and have been burdened by significant legacy debt. Declaration at *5. The Debtors state that their intent in filing for bankruptcy is to “(i) gain access to liquidity, (ii) reduce pension and operational costs, (iii) realign its store locations and format and (iv) execute on one or more options to create value for stakeholders.” Declaration at *6. Pursuant with these goals, the Debtors have planned to undergo a very accelerated sales process, with a goal of having a final sale hearing on March 14, 2016. Declaration at *7.
If you want to stay up-to-date on the filings in this case, I’d recommend you keep an eye on the website created by the claims and noticing agent, Kurtzman Carson Consultants LLC. The website contains a copy of the bankruptcy docket, free to download and view. The website is located at http://www.kccllc.net/hancockfabrics. If you are a creditor of the Debtors, you may want to consider participating in the formation meeting, which has not yet been scheduled. The formation meeting is the meeting at which the United States Trustee appoints a committee of unsecured creditors. Being on the creditors’ committee is the best way for an unsecured creditor to stay involved in, and an active participant in, the bankruptcy proceedings.
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