Yes, Lillian Vernon Corp. has been sold. RedEnvelope Inc., Sharper Image Corp. and several others will soon follow. But it's often a long time -- like a year or longer -- before debtor counsel can finally close the book on the case.
Witness Enesco Group Inc. Remember the maker of ornaments, figurines and music boxes that filed for Chapter 11 back in January 2007? The company engineered a quick $55 million sale to Tinicum Capital Partners II LP only a month into the bankruptcy, and really hasn't been heard from since.
Lawyers on the case didn't go into hiatus. They still had to resolve claims, liquidate remaining assets (primarily the prosecution of lawsuits) and distribute the proceeds gained from those efforts to creditors. Those tasks took debtor counsel more than a year to do, mostly because the Internal Revenue Service took several months to peruse Enesco's liquidation plan and still hasn't decided if it supports it or not.
In fact, Enesco has been waiting so long to have its confirmation hearing that it has been threatened with administrative insolvency and a conversion to Chapter 7 because of creeping administrative costs. The company has had to fashion a settlement outside the context of its plan just to try to put an end to the IRS impasse.
Enesco is hoping to have its confirmation hearing on May 14. If it can confirm its plan then, that will mean that more than 13 months of its roughly 16-month stay in Chapter 11 were focused on the little things. It all serves as a reminder for those following the parade of asset sales in bankruptcy nowadays that the devil is still in the details. - Ben Fidler
