Bloomberg Law’s® Bankruptcy Law News publishes case summaries of the most recent important bankruptcy law decisions, tracks major commercial bankruptcies, and reports on developments in bankruptcy...
By Daniel Gill
“But wait ... there’s more!” Or is there?
Ronco, the bankrupt gadget maker whose infomercials on products like the Veg-O-Matic featuring founder Ron Popeil and pop-culture gems like “set it and forget it” and “it slices, it dices,” is unclear about the future, its bankruptcy attorney told Bloomberg Law May 9.
As revealed by Ronco’s schedules and statements filed May 8, the company may face a unique challenge in bankruptcy. It appears to have transferred substantially all its assets prior to filing bankruptcy.
The company filed Chapter 11 April 24, claiming assets and liabilities between $1 million and $10 million. It’s the second turn through bankruptcy since Popeil sold the company for $55 million in 2005.
This time, Ronco ran out of money and ceased operation in January, Kell Mercer, the company’s attorney, said. It currently has a staff of one.
Prior to filing, Ronco commenced assignment for the benefit of creditors proceedings in New Jersey. ABCs are state procedures similar to bankruptcy and allow for sales of businesses with certain protections.
In the ABC, Ronco gave substantially all its assets to a neutral assignee in anticipation of a sale to a third party which would be approved by a judge. But the company filed bankruptcy before that sale could occur.
Mercer said that it’s unclear whether the assignee will voluntarily transfer Ronco’s assets back to the company, or whether Ronco will have to file a complaint in the bankruptcy case to recover the assets.
In the meantime, Ronco is looking for debtor-in-possession financing, to allow it to resume operations and resolve its debt.
“We are still optimistic for landing DIP financing and having a path forward in the bankruptcy,” Mercer said.
The company’s objective is to resume operating and emerge from bankruptcy as a going concern. If that’s not possible, then the company will have to sell its assets, consisting mostly of patents and trademarks. Failing that, it may convert to a Chapter 7 for liquidation, Mercer said.
“The direction of the case is unclear at this time,” he said.
The debtor is represented by Kell Mercer, Austin, Texas.
The case is In re Ronco Holdings, Inc. , Bankr. W.D. Tex., Schedules and Statement of Financial Affairs 5/8/18 .
To contact the reporter on this story: Daniel Gill in Washington at email@example.com
To contact the editor responsible for this story: Jay Horowitz at firstname.lastname@example.org
Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)