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Ultimate Changing To Chapter 7

Thornton, Colo. – Ultimate
Electronics is looking to convert its Chapter 11 bankruptcy to Chapter 7

The company, which
liquidated its stores this month and will auction off it trademark, website and
other intellectual assets on May 25, filed the motion this week in a U.S.
Bankruptcy Court in Delaware, Bloomberg reported.

The move was prompted by
GE Capital Corp. (GECC), a secured lender owed $65 million, which is blocking
Ultimate’s access to cash. The chain is now requesting a trustee to oversee its
final dissolution.

The retailer, founded in
1968 by Bill and Barbara Pearse and controlled by investor Mark Wattles since
2005, filed for Chapter 11 bankruptcy protection in January for the second time
in six years after business soured, bills went unpaid and vendors severed their
credit lines. The company opted to sell off its inventory in a six-week fire
sale after it was unable to secure financing or access its cash collateral to
fund operations.