Avenica’s bankruptcy case is set for further delay, as indicated by the latest documents filed at the New York Eastern Bankruptcy Court. The hearing for the conversion of Avenica’s bankruptcy from Chapter 11 to Chapter 7 has been postponed.

The case, initially filed early in 2017, concerns the bankruptcy of Avenica Inc. The company used to provide services and technical support to FX broker Gallant Capital Markets, which also filed for Chapter 11 relief in April 2017. In fact, the estates of Gallant and Avenica were administered jointly by Esther DuVal, CPA, as their Chapter 11 Trustee.

Let’s also note that Salvatore Buccatello held 100% of the membership interest in Avenica and was the CEO of both debtors.

Now, Avenica’s case is set for a shift. On December 22, 2020, Esther DuVal filed a notice with the Court informing it that she will present a proposed Stipulated Order converting the Avenica, Inc. estate from a Chapter 11 case to a Chapter 7 case. The reason for that change is that the Avenica estate had no assets for the Trustee to administer, and thus could not fulfill the requirements under Bankruptcy Code § 1129.

Chapter 11 is often called the reorganization chapter, as it allows businesses and some individuals to reorganize, without having to liquidate all assets. In filing a Chapter 11, the debtor presents a plan to creditors, which, if accepted by the creditors and approved by the Court, will allow the debtor to reorganize personal, financial or business affairs, and again become a financially productive entity.

Chapter 7 is also known as the liquidation chapter. It is used by individuals and businesses that are unable to repair their financial situation. In Chapter 7, asset classes, the debtor’s estate is liquidated under the rules of the bankruptcy code. Liquidation is the process through which the debtor’s non-exempt property is sold for cash by a trustee and the proceeds are distributed to creditors.

A letter filed by the firm representing Esther DuVal in her capacity as the Chapter 11 Trustee of the jointly administered estates of Avenica, Inc. and Gallant Capital Markets, Ltd. on January 19, 2021, stated that the conversion hearing is rescheduled. The letter confirms the adjournment of the Conversion Hearing from Tuesday, January 19, 2021 to February 25, 2021.

Back in May 2017, when the motion for the joint administration of the estates of Avenica Inc and Gallant Capital Markets was filed, the debtors estimated that there were more than 1,200 customers and parties-in-interest in these bankruptcy cases.