Art Van Furniture in ‘Cataclysmic’ Situation, Facing Liquidation

Art Van Furniture, LLC, forced to halt going-out-of-business sales amid the new coronavirus pandemic, has insufficient cash to meet its obligations, and should decide quickly whether to convert its bankruptcy to a Chapter 7 liquidation, a bankruptcy judge said.

Chief Judge Christopher Sontchi of the U.S. Bankruptcy Court for the District of Delaware Tuesday ordered the retailer to freeze all spending and tell the court April 3 how much it still owes employees for work performed through the end of March.

Art Van’s slide toward Chapter 7 comes a week after it told the court it had lost its bankruptcy ...