Classy Dame works on second backruptcy

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The two-year-long bankruptcy saga of The Classy Dame, a 25-year-old upscale women's clothing store located in the Brentwood Center, is not over yet. |ret||ret||tab|

Owner Terry Heitman remains adamant the business will not close. Heitman and his mother, Bettie, operate the business with three part-time employees. |ret||ret||tab|

The business first filed for Chapter 11 reorganization proceedings in October 1998 and was not successful in obtaining confirmation of its reorganization plan. At the time of its first filing, the business owed about $263,000. That case was dismissed in May 1999. |ret||ret||tab|

The Classy Dame refiled for Chapter 11 on Feb. 28 of this year and now owes $459,577 to creditors, none of which are in Springfield, Heitman said. The business' assets are $166,147. About $135,000 of The Classy Dame's liabilities are to creditors holding secured claims. The Classy Dame owes about $35,000 to creditors holding unsecured priority claims and about $290,000 to creditors holding unsecured nonpriority claims. |ret||ret||tab|

The business missed a June 27 deadline to file a reorganization plan for its second Chapter 11 bankruptcy filing. |ret||ret||tab|

U.S. trustee Jerry L. Phillips July 10 filed a motion to dismiss or convert the case to a Chapter 7 bankruptcy, citing the debtor's failure to file a plan, the cancellation of the commercial liability policy on the business for non-payment, the debtor's monthly operating reports showing insufficient income to fund a plan, the business' gross income declining each month since the second filing, nonpayment of sales taxes and negative month-ending bank balances. |ret||ret||tab|

The trustee's motion also stated the business and Heitman had previously filed for bankruptcy twice in the last two years and was unsuccessful in obtaining confirmation of a plan in either Chapter 11 or Chapter 13 bankruptcy. Heitman said the previous bankruptcies were unsuccessful because of missed deadlines for filings. |ret||ret||tab|

"We just automatically fell out of bankruptcy, and that's why we had to refile. I've spent close to $50,000 on attorney's fees, and if you told me two years ago that I would still be doing bankruptcy now, I wouldn't have believed you," Heitman said. |ret||ret||tab|

In an Aug. 16 hearing, Phillips agreed to extend the deadline for filing a reorganization plan to Sept. 27, but he said if the new deadline is not met, the debtor would consent to dismissal of the case or conversion to liquidation proceedings.|ret||ret||tab|

David Schroeder, attorney for the debtor, said Heitman missed the June 27 deadline because he did not have the required information for the plan from The Classy Dame's accountant. |ret||ret||tab|

Heitman said the reorganization plan was filed the day of the hearing. He said the store has obtained commercial liability insurance and that the reorganization plan involves a payment plan to creditors. |ret||ret||tab|

When the business first filed for Chapter 11 in 1998, Heitman said the company's financial trouble was brought on by persistent debts and overall changes in the women's clothing business, including the fact that women are not dressing up as often. Heitman said his store now carries a full line of sportswear, as well as evening wear and mother-of-the-bride dresses. |ret||ret||tab|

Heitman said moving to a larger location in the Brentwood Center and adding more merchandise, such as shoes, to its offerings hurt the business. The Classy Dame stopped selling shoes more than a year ago, Heitman said. The Classy Dame is current on its $2,300 per month rent payments to Gillenwaters Developers Inc. for the Brentwood Center space and he said that business is looking up. |ret||ret||tab|

"Last year was our best year. It was our third year in the Brentwood Center and we had the right merchandise. I think our business will increase even more this fall," Heitman said. [[In-content Ad]]