Bankruptcy Court Approves Lionel’s Motion to Extend its Time to File For Reorganization by Erol Gurcan
July 25, 2006-In my article dated July 21, 2006, I stated Lionel’s attorneys had recently filed a motion (an application for a court order) with the bankruptcy court seeking to extend its time to file a plan of reorganization. The motion specifically requested that Lionel be given 120 days to file a plan of reorganization with the court once there is a decision in the MTH-Lionel trade secrets appeal heard on June 7, 2006. A decision in that case is expected late this year or early next year. Lionel’s motion also sought an additional 60 days to allow other interested parties, such as Lionel’s creditors (like MTH) to file their own plan with the court, once Lionel’s plan was filed. In my July 21 article, I stated I expected the motion to be granted. Click on the link below to read on.
The motion was heard today in the bankruptcy court. Judge Burton
Lifland granted Lionel’s motion, but instead of approving the 120 days
sought, his order directed a reorganization plan must be filed by
Lionel within 75 days once there the decision in the trade secrets
appeal. The court’s order also gave other interested parties an
additional 60 days to file their own plans, once Lionel’s is filed,
which was the time period sought by Lionel in its motion. MTH’s
attorneys did not oppose Lionel’s motion and did not object to the
court’s order entered today.
In sum, all reorganization plans must be filed with the bankruptcy
court within 4 and a half months after the appeals court decision in
the trade secrets case. Based on this, the process for Lionel to begin
emerging from bankruptcy should be in spring 2007, a period of at least
nine months from now. Stated another way, Lionel will remain in
bankruptcy for that period of time.
Erol B. Gurcan, an O Gauge industry legal expert, is a regular contributor to OGaugeWatch.com
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