USA Springs should be liquidated, says bankruptcy trustee
The bankruptcy trustee filed a motion Tuesday in Bankruptcy Court to convert USA Springs' Chapter 11 reorganization bankruptcy to Chapter 7 liquidation after the cancelation of a scheduled July 20 auction and the company's bankruptcy attorneys filed motions to quit the case.
"Without bankruptcy counsel, the Debtor will be unable to move forward," wrote Geraldine Karonis, assistant trustee. "The Debtor has been in chapter 11 for more than four years."
If the trustee's motion is successful, the trustee office would take control of the company and sell off its assets, as opposed to the company continuing its attempt to sell it as a going concern and to finish a partially completed, and controversial, water bottling plant on the Barrington-Nottingham border.
In 2009, the trustee's office sought to convert the bankruptcy filing to Chapter 7, but USA Springs hired Boston bankruptcy attorney Alan Braunstein, convincing the bankruptcy court to give it more time. But after the failure of the latest financing deal - a $60 million arrangement with a Swiss firm -- Braunstein arranged for the aforementioned July 20 auction. He earlier this month sought to delay the auction to September, and at the same time filed another motion seeking to be allowed to quit the case, citing "irreconcilable differences." with USA Springs. The local counsel followed suit, leaving the bankruptcy case in the hands of municipal attorney Tony Soltani - who's also a state representative -- who had signed on to the case mainly to protect the environmental permits through the bankruptcy process.
Soltani told NHBR said he is not qualified as a bankruptcy attorney, and opposed Braunstein's motion to withdraw. Braunstein has not responded to NHBR phone calls and e-mails.
If the trustee takes over the case, the Official Committee of Unsecured Creditors can seek recovery of $8.4 million from a number of parties related to the debtor, charging fraudulent transfers. It could sell off the real estate and it could attempt to collect a $60 million judgment issued by the bankruptcy court against the Swiss-based Malom Group, which reneged on a promised financing deal, according to the filing.
A hearing on the trustee's motion and Braunstein's withdrawal motions, is scheduled for Aug. 7.