US-based global distributor CHS Electronics is seeking to liquidate its remaining assets instead of "reorganising" them as it previously announced.
The Miami-based worldwide microcomputer distributor, which has been having financial difficulties for some time, filed for Chapter 11 bankruptcy protection last month.
The company now plans to amend its Chapter 11 filing to allow CHS and its subsidiaries to operate as usual, while the company seeks the new plan's approval of US Bankruptcy Court, it said in a statement yesterday. US Chapter 11 bankruptcy regulations cover reorganisation of debtor businesses and allows for flexibility in plans for payment of debts to creditors.
When it filed for Chapter 11 last month, CHS filed for a plan of reorganisation providing for the sale of its European subsidiaries to Denmark-based Europa IT ApS, a company formed by Mark E. Keough, the former chief executive officer of CHS, while reorganising CHS to become a holding company for internet companies. CHS shareholders would retain a 75 per cent interest in the reorganised company.
Under the proposed change, the sale to Europa IT will still go through, but any remaining assets would be liquidated entirely for the creditors, with no distribution to CHS shareholders. After the liquidation, CHS would cease to operate.
A plan confirmation hearing is scheduled for July 11.
The company also said in the statement that Claudio Osorio has resigned from the positions of director and chief executive officer of CHS, which is now under court supervision, with employees managing administrative tasks.