Change will involve a liquidation of the company’s assets to repay creditors
WILMINGTON, Del. — A judge for the U.S. Bankruptcy Court for the District of Delaware has issued an order that converts the Mitchell Gold Co. bankruptcy case from Chapter 11 to Chapter 7.
Typically, a Chapter 11 case involves a restructuring of the business, allowing it to pay its debts with its future earnings. A Chapter 7 case involves the liquidation of assets to repay creditors.
As part of the transition, the court also has appointed George L. Miller as a trustee in the Chapter 7 case.
Mitchell Gold Co. notified its employees it was ceasing operations around Aug. 25 and later notified the state of North Carolina that the closing would impact 533 workers at its North Carolina operations in Taylorsville, Statesville and Hiddenite.
The closing also affected its employees at more than 25 of its retail locations in North America. On its website, the company said it employed more than 800 workers across its various operations, all of whom are impacted by the closing and the subsequent bankruptcy proceedings.
Several employees have filed lawsuits noting that the company did not provide the appropriate 60-day notice as generally required under state and federal WARN Act provisions.
The company filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the District of Delaware on Sept. 6, a month before the case was converted to Chapter 7.
As part of the conversion to a Chapter 7, the court said that the company must turn over all company records and books to the appointed trustee in the case within two weeks. Also within 14 days, it must also file schedules of unpaid debts incurred after the filing of its bankruptcy petition and prior to the conversion of the case.