Harvey’s Creditors Delay Bankruptcy Loan
by Alan Wolf -- TWICE, 2/12/2008
New York — A U.S. Bankruptcy Court in Manhattan put off approving a $1.5 million loan to Harvey Electronics after the chain’s unsecured creditors raised doubts about ever recovering their debts.
According to an Associated Press report, the creditors believe the loan will give the lender, Yorkville Advisors, a lien on Harvey’s remaining assets, including leases and intellectual property. Harvey already owes Yorkville $3.7 million in pre-bankruptcy debt, a lawyer for the creditors’ committee told AP, and the additional $1.5 million loan would dash any chance for recovery. The creditors favor liquidation.
Harvey reportedly claimed that the loan was the best and virtually only offer available at the time of its bankruptcy filing in December. The chain won interim approval to tap the loan last month, but has yet to do so, the lawyer said.
The court will consider the case again on Feb. 22.
Calls to Harvey’s senior management from TWICE were not returned at posting time.
Harvey currently operates six freestanding stores following the closing of its Manhattan flagship location two months ago, plus two Bang & Olufsen shops and a store-within-a-store at ABC Carpet & Home in New York City. It plans to relocate its freestanding store in Eatontown, N.J. to a design center in nearby Holmdel, N.J. over the next six weeks.
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