In a court hearing Wednesday, Central District of California Judge Deborah Saltzman approved several emergency “first day” motions that will keep the Valley Economic Development Center operating after its Chapter 11 bankruptcy filing last week.
First, Saltzman authorized banks to release administrative holds or “freezes” on the small business lender’s accounts so it can continue operating.
This will allow Sherman Oaks-based VEDC to pay its laid-off employees their final wages and other benefits, and to pay payroll taxes. Court documents indicate that all 25 of VEDC’s employees were laid off a day before filing for Chapter 11, and that 13 employees were subsequently rehired to assist with the transition. Attorneys cited more than $93,000 in unpaid wages and $78,000 in unpaid payroll taxes.
Additionally, VEDC is now able to continue paying rent and utility bills for the properties that house its various business centers.
Another order was approved that employs David Gottlieb of D. Gottlieb & Associates as VEDC’s chief restructuring officer to guide VEDC through Chapter 11. Gottlieb is joined by Santa Clara-based firm Sherwood Partners Inc. (led by Andrew De Camara) as the organization’s financial advisor, and L.A.-based law firm Levene Neale Bender Yoo & Brill L.L.P as bankruptcy counsel.
Finally, a motion was granted to extend the deadline for VEDC to file schedules of its assets and liabilities and a statement of its financial affairs. The case’s next hearing will occur July 30. It will be a continued hearing on cash usage.