Court action ...Classy Dame Chapter 11 case dismissed

by Karen E. Culp

SBJ Staff

The Classy Dame's Chapter 11 bankruptcy case was dismissed May 7 by U.S. Bankruptcy Court Judge Arthur Federman's order.

The case, filed Oct. 30, 1998, was dismissed as a result of The Classy Dame's failure to file a reorganization plan in the case, according to Federman's order. The Classy Dame is a 23-year-old Springfield retailer that sells women's apparel.

The company was a partnership, owned by Bettie Heitman and her son, Terry Heitman, but May 5, Terry Heitman purchased his mother's interest in the company for $1, thereby dissolving the partnership and making him the sole owner of the retail store.

Also on May 5, Heitman's attorney, Gary Love, submitted a motion asking Federman to convert the case to a Chapter 13 bankruptcy case. The motion received no response. Dudley Martin, an attorney representing Percheron Corporation, a creditor in the Classy Dame case, said Chapter 13 of the U.S. Bankruptcy Code was established to provide debt relief for working people. "It's what Chapter 11 is to business to people who earn a wage," Martin said.

On May 19, Martin's client, Percheron Corp., took action to try to recover its interest from The Classy Dame. A representative of the Greene County Sheriff's Office made an appearance at the store in the Brentwood Center and asked for about $6,909, the sum of what Percheron is owed plus court costs.

Martin said Love contacted him to say that Heitman would be filing Chapter 13 bankruptcy. Because of that, the sheriff's representative was called away but will be called back if the bankruptcy is not filed by May 24, Martin said.

The motion to convert the Chapter 11 to a Chapter 13 indicates that the move was necessary to protect the home where Terry and Bettie Heitman live.

The motion states that several of The Classy Dame's creditors have liens against the Heitmans' property, and that the "Chapter 11 proceeding could yield a situation where these liens remain in effect even after the successful completion of the Chapter 11."

The motion further states that the liens total about $45,000, that the home's liquidation value is about $120,000 and that it it subject to first and second mortgages totaling about $79,000.

As of The Classy Dame's Oct. 30, 1998, filing, it had total assets of $189,622 and total inventory at cost of $182,725. Secured claims by creditors totaled $2,696 while unsecured priority claims were $10,000.

Total unsecured nonpriority claims in the Chapter 11 case were $250,696.98, most of which are from shoe and clothing suppliers.

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