Earlier this year (May) the distressed paintball manufacturing company Smart Parts of Latrobe, PA, filed for Chapter 11 bankruptcy protection Information filed with the bankruptcy application seem to indicate that the company had been in trouble since as early as October of 2009.

Chapter 11 Bankruptcy allows the debtor (Smart Parts in this case) to attempt to shed some of their debt and re-organize the company in a manner acceptable to secured creditors (and which presumably allows the debtor company to once again become profitable).

Rumors on the paintball street have run rampant since the original petition for bankruptcy in May, with speculations naming virtually every other paintball company as a possible buyer, savior, acquirer or partner that many anonymous/unnamed sources have assured the paintball public would be the return of Smart Parts.

Today’s filing is a petition by the debtor (Smart Parts) to change their form of bankruptcy from Chapter 11 to Chapter 7.

Chapter 7 is liquidation.

Barring some major unforseen circumstances, a Chapter 7 filing means that Smart Parts will be selling off all of their assets – inventory, machinery, IP – everything – in order to settle their debts with their creditors.

Smart Parts may yet return (who knows what the Gardner brothers will do), but if so,  it will be under an entirely new name, with entirely new products.

A copy of the filing is included below.

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
__________________________________________
)
IN RE: ) Chapter 11
)
SMART PARTS, INC. ) Case No. 10-23521-TPA
)
Debtor. ) Doc. No. _____
__________________________________________)
) Related to Doc. No. ____
SMART PARTS, INC. )
)
Movant, ) Hearing Date and Time:
)
v. )
) Response Deadline:
NO RESPONDENTS. )
__________________________________________)
ORDER CONVERTING CHAPTER 11 CASE TO A CASE UNDER CHAPTER 7
AND NOW, this ____ day of ____________, 2010, and upon consideration of the motion
(the “Motion”) of Smart Parts, Inc. (the “Debtor”) styled: Motion of the Debtor to Convert Its
Chapter 11 Case to a Case under Chapter 7, and it appearing that notice of the Motion has been
adequate and that the relief sought in the Motion is in the best interest of the Debtor, its estate
and creditors and that good and sufficient cause exists for granting the relief sought in the
Motion, it is hereby:
ORDERED, that the Motion is granted; and it is further
ORDERED, that this Chapter 11 case is hereby converted to a case under Chapter 7 of
Title 11 of the United States Code; and it is further
ORDERED, that the United States Trustee is directed to appoint a Chapter 7 trustee as
soon as possible; and it is further
Case 10-23521-TPA Doc 59-1 Filed 07/28/10 Entered 07/28/10 18:23:26 Desc
Proposed Order Page 1 of 2
{P0175119.1 }2
ORDERED that the clerk shall serve a copy of this Order on all creditors and parties
having requested notice.
UNITED STATES BANKRUPTCY JUDGE