Court Rejects Michaels Stores Executive’s Chapter 11 Bankruptcy Plan

by San Antonio Attorney

Texas businessman Samuel Evans Wyly filed for Chapter 11 bankruptcy in a court in Dallas, but his third try to restructure under Chapter 11 was unsuccessful and the bankruptcy court disapproved the revised plan.

Wyly is Michaels Stores Inc.’s vice chairman of the board.  According to reports, the bankruptcy filing arose from disputes with the Securities and Exchange Commission (SEC).  The bankruptcy filing was carried out last October 2014.

In November, he filed a motion to concession a controversy with the government agency.  The court granted that motion.

By Nov.  8, the settlement agreement between Wyly and SEC was approved by the court.  These

The court disapproved Caroline D. Wyly’s Chapter 11 plan, and would have to convert to Chapter 7.  There was a dual motion to alter the court order lifting the automatic stay to permit the SEC to pursue Charles Wyly’s estate filed by the government agency on Nov. 10, which was approved.  The SEC, Internal Revenue Service and Wyly would have to be in agreement on the extension, the court said.

The court order also mandated the parties to update the court before the extension period expires in case these parties want to proceed under Chapter 11.   If the debtor fails, the SEC and IRS, jointly, must ask for a court meeting before the expiration of the extended time, and then the U.S. trustee will commence the conversion on or before Nov.  18.

A hearing will also be conducted on Dec. 5 before Bankruptcy Judge Barbara J. Houser.  The court documents show a list of many creditors.

Wyly, one of the founders of Ranger Capital Group, is a long-time businessman and known philanthropist.  He was an IBM salesman in the 1950’s and worked for Honeywell as a sales manager in the 1960’s.  For many years, he bought and sold many businesses worth millions of dollars.

 

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