Shopko Creditors Seek Forced Liquidation, Limiting Expenses (1)

Shopko Stores’ unsecured creditors are asking a federal bankruptcy court in Nebraska to convert its Chapter 11 bankruptcy proceeding to a Chapter 7 liquidation to halt mounting administrative expenses and preserve the retailer’s value for creditors.

Shopko’s administrative insolvency—it owes tens of millions of dollars in administrative claims, mostly professional fees—follows disappointing pharmacy sales in its optical unit and questionable management decisions, the official creditors’ committee said in court documents.

Conversion to Chapter 7 and the appointment of a Chapter 7 trustee will minimize the administrative expenses accruing and allow the trustee to claw back any improper expenses by ...