A Blue Note
Things are only getting worse for Brook Mays. First the company goes into Chapter 11. Now, the companies to whom the 105-year-old local musical instrument-supplying institution owes millions want it to go into Chapter 7. Brook Mays owes $41 million on a loan it took out from JP Morgan Chase Bank to pay back the likes of Yamaha Corp. of America (to which Brook Mays owes $6,471,111), Conn-Selmer Inc. ($4,990,751), Roland Corp. U.S. ($1,777,582), Kawai America Corp. ($1,587,690) and others. Well, those companies are worried Chase will get its dough while they'll be left with nothing. So, they're claiming in dourt documents filed this week, not so friggin' fast. Says The Daily Deal this morning:
"The committee of unsecured creditors in the Dallas-based musical instrument retailer's Chapter 11 case filed a motion on Tuesday to convert the case, arguing that the debtor's assets won't sell for more than its secured debt, leaving creditors other than J.P. Morgan Chase Bank NA with no recovery. Under Chapter 7, a trustee would have to be appointed to oversee Brook Mays, which last week announced that it would look to sell its business as either a going concern or asset by asset to multiple buyers during a Section 363 auction on Aug. 8. But no stalking-horse bidder has been lined up.
'Permitting this Chapter 11 case to proceed to an auction at this time would leave the debtor with no ability to even fund wind-down operations or confirm a liquidating plan, the bulk of the debtor's assets would have been sold and the proceeds funneled to pay [J.P. Morgan's] outstanding claims,' noted a filing made by the committee.
The committee went on to add in court papers that the case was filed with the sole intent to liquidate the debtor."
Which means, just maybe and perhaps most likely: Adios, Brook Mays. We'd play "Taps," but our cornet was seized and auctioned off by the court last week. --Robert Wilonsky