Schlotsky’s Bankruptcy Remains Chapter 11

Law360, New York (March 14, 2006, 12:00 AM EST) -- The two motions to convert the Schlotsky’s Deli bankruptcy petition to a Chapter 7 case have been rendered moot after a judge approved a liquidation plan under the company's Chapter 11 filing.

A Texas bankruptcy judge gave the green light to a liquidation plan that would defer payments to professionals while the company divests itself of its assets. Unlike a Chapter 7 liquidation, in which control of the company would be handed over to a trustee, Schlotsky’s will retain control during the dismantling.

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