Vestiage, Inc. (VEST)

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http://www.watertowndailytimes.com/article/20100128/NEWS03/301289963

Trustee seeks bankruptcy conversion
HACKETTS STORES: Court appointee cites missing documents, files motion to send chain into liquidation
By BRIAN KELLY
TIMES STAFF WRITER
THURSDAY, JANUARY 28, 2010
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The trustee overseeing the U.S. Bankruptcy Court action of Hacketts department stores has filed a motion with the court that, if approved, could force the company to shut down and liquidate its assets.

U.S. Trustee Diane G. Adams claims in court documents filed Tuesday that Patrick Hackett Hardware Co.'s failure to file certain financial statements in a timely manner has delayed the case significantly and otherwise hindered her ability to act as a trustee in the matter.

Based on that, she has filed a motion asking to have the case converted from a Chapter 11 proceeding, in which Hacketts would remain in business while it reorganizes, to a Chapter 7 proceeding, in which the business would stop operating and the trustee would sell its assets to pay creditors.

Thomas W. Scozzafava, Hacketts chief executive officer, said the missing paperwork was filed Tuesday and Wednesday and that he expects, with that remedy, the motion will be withdrawn at some point.

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Court filings support Mr. Scozzafava's claim, as several of the documents cited as missing by the trustee were filed either Tuesday or Wednesday.

Hacketts filed for Chapter 11 bankruptcy protection Nov. 11, citing debts in excess of $1 million and assets of less than $50,000. According to court documents, during a Nov. 30 initial interview with Hacketts, the trustee's office requested four documents: a copy of its most recent audited financial statement; proof that pre-petition bank accounts were closed; its most recent report of physical inventory, which was taken in June, and a projected cash budget for the first six months of post-petition operations.

According to the trustee's petition, none of those documents had been submitted as of the time she submitted her motion Tuesday.

According to the petition, Mr. Scozzafava met with the trustee and creditors Dec. 15, at which time it was noted that Hacketts' original bankruptcy petition was signed electronically by Mr. Scozzafava and Hebert L. Becker, the company's chief operating officer. The company's bankruptcy attorney, David P. Antonucci, stated that only Mr. Becker had signed the original petition; the trustee told Mr. Antonucci to file an amended petition to reflect that only Mr. Becker had signed it. The amended petition was never filed, the trustee claims.

Because Hacketts still was missing other necessary documents, the meeting was adjourned to Jan. 8. On Jan. 7, Mr. Antonucci told the trustee the documents would not be filed before that date and the meeting was adjourned to Jan. 22. On Jan. 20, Mr. Antonucci told the trustee the documents would be filed Monday, according to court documents.

On Tuesday, Mr. Antonucci did file several documents, but omitted a "verification or unsworn declaration" that needed to accompany them. Also missing as of the filing of the trustee's motion were required operating reports for November and December, according to court documents.

Mr. Antonucci was not available for comment Wednesday. The trustee has requested that a hearing be held March 23 in Utica on the conversion motion.

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