Spongetech Trustee Wants Case Converted To Ch. 7

Law360, New York (October 11, 2010, 6:39 PM EDT) -- The trustee for bankrupt Spongetech Delivery Systems Inc. has asked that the case be converted to a Chapter 7, saying there is "no possibility" of rehabilitation in the wake of alleged criminal securities violations by executives and the Section 363 sale of the company's primary manufacturing unit.

Chapter 11 trustee Kenneth P. Silverman lodged a motion Friday in the U.S. Bankruptcy Court for the Southern District of New York, saying the involuntary bankruptcy of Spongetech subsidiary Dicon Technologies LLC has made it impossible for the soap-filled-sponge...
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