Maximus Supply Chain Holdings: Chapter 11 Plan Puts Unsecured Recovery at 2%

Maximus Supply Chain Holdings, a Lafayette, Indiana-based manufacturing, logistics, and warehousing enterprise, filed chapter 11 on June 25, 2024 in the U.S. Bankruptcy Court for the Northern District of Indiana (Case No. 24-40167), after a lender dispute with Centier Bank escalated from forbearance to account freezes and receivership proceedings. The filing covered eight jointly administered entities operating across high-tech manufacturing, trucking transportation, and warehouse fulfillment. The case is assigned to Judge Robert E. Grant.

The case has moved through several phases since the petition date: a cash-collateral dispute that required twelve interim court orders over nearly twenty months, a $9.95 million asset sale to Wabash National, contested insider DIP financing from a company controlled by the debtors' principals, and ultimately a small-business reorganization plan filed in December 2025. The plan proposes full payment of secured and administrative claims while projecting roughly 2% recovery for general unsecured creditors through a $216,713.35 settlement fund. A confirmation hearing is scheduled for April 20, 2026 at 11:30 a.m.

Debtor(s)	Maximus Supply Chain Holdings, LLC (8 jointly administered entities)
Court	U.S. Bankruptcy Court, Northern District of Indiana
Case Number	24-40167
Judge	Hon. Robert E. Grant
Petition Date	June 25, 2024
Confirmation Hearing	April 20, 2026

Company Background and Operations

Maximus Group was founded in 2019 as a supply-chain solutions provider headquartered at 3535 Brady Lane in Lafayette, Indiana. The company operates in three lines of business: high-tech manufacturing and supply-chain solutions, logistics and trucking transportation, and warehousing. Its manufacturing clients span the automotive, commercial vehicle, agricultural equipment, recreational vehicle, and power manufacturing industries.

The company maintained 350,000 square feet of manufacturing and fulfillment space along with a fleet of 50 tractors and 250 trailers supporting direct transportation customers and its manufacturing and fulfillment operations. At the time of filing, Sam Bazzi, the founder and CEO, reported that Maximus employed approximately 110 people across the continental United States. Maximus Supply Chain Holdings was named one of the fastest-growing private companies in the country on the 2024 Inc. 5000.

Forbearance Breakdown and Centier Bank Conflict

Sam Bazzi's first-day declaration traces the company's financial difficulties to a combination of operating pressures and a lender conflict that left the debtors unable to access their own accounts. Management stated that transportation demand and post-COVID growth expectations were undermined by volatile input costs, material shortages, labor constraints, and a sharp pullback in anticipated customer demand. One major customer reduced projected 2023 purchases by 50%, compounding the cash-flow pressure across the group's manufacturing operations.

The declaration describes a forbearance agreement entered with Centier Bank on March 12, 2024, under which Centier agreed to refrain from exercising default remedies while the parties attempted to negotiate a resolution. When that agreement expired on April 9, 2024, Centier accelerated the outstanding debt, froze the debtors' bank accounts, and intercepted receivables — effectively cutting off operating liquidity. The debtors sought injunctive relief in state court on April 11, 2024, just two days after the acceleration, but Centier subsequently moved to appoint a receiver over the debtors' assets. The chapter 11 petitions followed on June 25, 2024, roughly ten weeks after the forbearance collapsed. The filing halted the receivership proceedings and gave the debtors access to the automatic stay while they sought authority to use cash collateral.

Prepetition Debt and Secured Creditor Claims

The first-day declaration estimated roughly $10.22 million of short-term debt and $25.19 million of long-term debt, placing total funded indebtedness at approximately $35.41 million across the eight debtor entities. The short-term obligations included working-capital lines and current maturities on equipment financing, while the long-term component was concentrated in term debt and equipment loans secured by the debtors' manufacturing assets, fleet, and real property interests.

Centier Bank is identified as the senior secured lender, holding the largest position in the capital stack and asserting liens across substantially all of the debtors' assets — including accounts receivable, equipment, inventory, and real property. Centier's dominant position in the collateral package is what gave the bank the leverage to freeze accounts and intercept receivables when the forbearance expired, and it is the reason the cash-collateral dispute became the defining feature of the first twenty months of the case.

Additional secured creditor claims were asserted by Cambridge Ventures, Lynx Capital, M&T Equipment Finance, and other parties reflected in UCC filings. Cambridge Ventures held a significant secured position that entitled it to adequate-protection payments alongside Centier under the interim cash-collateral orders. The first-day declaration describes a multi-layered collateral structure in which several lenders held overlapping security interests in the debtors' equipment, receivables, and real property, creating intercreditor complexity that surfaced repeatedly during the cash-collateral proceedings and the Wabash sale lien-attachment process. Midland States Bank, which later objected to the Wabash sale, asserted a separate leased-equipment interest of approximately $447,198.50.

By the plan stage, the debtors projected approximately $10.84 million of general unsecured claims. The disclosure statement's liquidation analysis concluded that a hypothetical chapter 7 conversion would yield zero recovery for unsecured creditors, providing the baseline comparison for the plan's proposed 2% distribution through the settlement fund.

Prolonged Cash-Collateral Dispute

The debtors' first-day cash collateral motion, filed on June 26, 2024 — one day after the petition — sought authority to use cash collateral under a 13-week budget to fund payroll and operating expenses. The motion emphasized that without immediate access to cash collateral, the debtors would be unable to continue operations, pay employees, or preserve going-concern value. The emergency nature of the request reflected the fact that Centier's prepetition account freezes had left the debtors with no independent access to operating funds.

The proposed adequate-protection package included replacement liens for secured creditors on all postpetition assets to the extent of any diminution in their collateral value, ordinary-course-use restrictions limiting cash expenditures to budgeted categories, financial reporting obligations including periodic cash-flow updates to the secured creditors, current payment of taxes accruing against the collateral, and maintenance of insurance on all insured assets. The package was designed to protect Centier and the junior lienholders against erosion of their collateral value while allowing the debtors to use cash in the ordinary course of business. The court entered an interim cash-collateral order on June 28, 2024, two days after the petition, allowing the debtors to begin operating under the 13-week budget framework. A separate interim wage order was also entered on June 28, authorizing the debtors to pay prepetition employee wages and benefits to preserve their workforce.

The parties were unable to reach a consensual final cash-collateral order, and the case instead operated under a series of interim orders that were repeatedly extended. The interim orders progressed through at least twelve iterations, with the twelfth interim cash-collateral order entered on February 17, 2026 — nearly twenty months after the petition date. The extended duration of the interim cash-collateral regime reflects the ongoing tensions between the debtors and Centier Bank, which retained leverage over the estate's day-to-day operations through each successive budget cycle. The inability to achieve a final order meant the debtors returned to court repeatedly to obtain continued operating authority, a process that contributed to the elevated professional fee burden in the case.

The Wabash National Asset Sale

In September 2024, the debtors moved to sell certain manufacturing assets to Wabash National, L.P. by private sale rather than through a public auction process. The transaction covered manufacturing lines and related equipment, associated books and records, warranty rights, certain insurance proceeds, and the assumption and assignment of a facility lease in Lafayette known as the Kepner Facility. The debtors framed the Wabash transaction as the centerpiece of a downsizing strategy that would allow the company to shed its largest manufacturing operation while focusing on its remaining logistics and warehousing lines of business.

The sale motion stated a $9.95 million purchase price with a $1 million deposit and asked the court to approve the sale free and clear of liens under section 363(f). Valid liens would attach to sale proceeds in the same priority order as they existed prepetition, pending further court direction on lien allocation. The debtors described the private-sale structure as value-maximizing, arguing that a public auction process was unlikely to generate a higher price given the specialized nature of the manufacturing equipment and the importance of the Kepner Facility lease assumption to the buyer.

Midland States Bank filed a limited objection arguing that certain leased equipment included in the proposed sale was its property rather than estate property. Midland asserted a claim of approximately $447,198.50 and asked the court to clarify that the equipment was not included in the sale unless the requirements of section 363(f)(3) were satisfied — meaning Midland's interest could only be transferred if the purchase price exceeded the aggregate value of all liens on the property.

The court approved the Wabash sale on October 2, 2024, approximately four weeks after the motion was filed. The sale order authorized the transfer free and clear of liens, with valid liens attaching to the proceeds in prepetition priority order. The $9.95 million in sale proceeds became a significant source of estate liquidity, but the lien-attachment provisions meant that the secured creditors — principally Centier Bank and Cambridge Ventures — retained their priority claims against the proceeds. The allocation of sale proceeds among the competing lienholders was left to be resolved through the plan process or further court direction, adding another layer of complexity to the already-contested cash-collateral dynamics.

The Wabash transaction reduced the debtors' operating footprint significantly by eliminating the Kepner Facility manufacturing operations, but it also generated the cash cushion that allowed the debtors to continue operating their logistics and warehousing businesses through the plan-development period that followed.

Insider DIP Financing From NovaTech

In February 2025, approximately eight months after the petition, the debtors sought approval of insider DIP financing from NovaTech Manufacturing Corporation, an entity whose shareholders are Inna and Sam Bazzi — the same individuals who serve as the debtors' principals. The original motion requested a $150,000 revolving line of credit with an initial $50,000 draw at 7% interest. The debtors represented that the proceeds were earmarked for operating needs including adequate-protection payments to Centier Bank and Cambridge Ventures, suggesting that the estate's cash position had tightened enough by early 2025 to require supplemental financing even after the Wabash sale.

The insider DIP request drew objections from both Centier Bank and the U.S. Trustee. The objections focused on the terms of the proposed financing, particularly a 15% maturity premium that the lender would collect at the end of the loan term and the potential for the facility to prime or dilute Centier's secured position.

The dispute was resolved by stipulation filed in April 2025. The negotiated settlement materially narrowed the original terms: the loan was recharacterized as an unsecured administrative claim subordinate to Centier's secured claims, eliminating any priming effect; the requested 15% maturity premium was struck entirely; the 15% interest rate was limited to default scenarios only, with the standard 7% rate applying in all non-default periods; Centier received notice-and-cure rights allowing it to intervene if the debtors defaulted on the NovaTech facility; and the parties agreed that no increases above the initial $50,000 draw could occur without further court approval and creditor notice. The stipulation effectively converted what had been proposed as a secured revolving facility into a modest unsecured administrative advance, significantly limiting the Bazzis' ability to use the DIP structure to build a priority claim against the estate.

Plan Class Treatment and Proposed Recoveries

The debtors filed their disclosure statement and chapter 11 plan on December 16, 2025, approximately eighteen months after the petition date. The plan is structured as a small-business reorganization that would allow the Maximus entities to emerge from chapter 11 as a going concern with reduced debt.

Administrative claims	Full payment	Unimpaired
Priority tax claims	Full payment	Unimpaired
Secured claims	Replacement notes, 84 months at 5%	Impaired
General unsecured claims (~$10.84M)	$216,713.35 settlement fund (~2%)	Impaired
Equity interests	Canceled; new equity to Inna Bazzi (51%) and Sam Bazzi (49%)	Impaired

The plan treats the major claim classes as follows:

Secured claims. The plan classifies secured claims as impaired but proposes payment in full through replacement notes amortized over 84 months (seven years) at 5% interest, with balloon payments due at maturity. This structure would require the secured creditors — principally Centier Bank, Cambridge Ventures, and the other lienholders — to accept extended repayment timelines and below-market interest rates in exchange for full recovery of principal. The replacement-note structure is a common small-business plan mechanism that preserves going-concern value while stretching out secured creditor recoveries.

Administrative and priority tax claims. Both categories are slated for full payment under the plan, consistent with the statutory requirements of sections 1129(a)(9)(A) and 507(a)(2). The administrative claims include professional fees, U.S. Trustee quarterly fees, and the NovaTech insider DIP advance (as recharacterized by the April 2025 stipulation).

General unsecured claims. The plan projects a settlement fund of $216,713.35, representing approximately 2% recovery on roughly $10.84 million of allowed unsecured claims. The disclosure statement contrasts that with a hypothetical chapter 7 outcome of zero recovery for this class, arguing that the plan provides a meaningful distribution that would not be available in liquidation. The 2% projected recovery reflects the estate's position after payment of all secured, administrative, and priority claims — the unsecured settlement fund is funded from remaining estate assets and projected operating cash flow.

Equity interests. Existing equity would be canceled on the plan's effective date. New equity in the reorganized debtor would be issued 51% to Inna Bazzi and 49% to Sam Bazzi in exchange for the waiver of $150,000 in court-approved insider postpetition financing from NovaTech Manufacturing Corporation. The disclosure materials characterize this waiver as a substantial new-value contribution supporting the plan and justifying the retention of reorganized equity by insiders. The new-value exchange is significant because it allows the Bazzis to retain control of the reorganized company despite the cancellation of their prepetition equity interests and the limited recovery available to unsecured creditors.

Confirmation timeline. The court's solicitation order entered February 17, 2026, set a March 30, 2026 ballot and objection deadline, an April 6, 2026 ballot report and cramdown motion deadline, and an April 20, 2026 confirmation hearing at 11:30 a.m. The inclusion of a cramdown motion deadline suggests the debtors anticipated the possibility that one or more impaired classes might reject the plan, requiring the court to confirm the plan over the dissenting class's objection under section 1129(b). As of mid-March 2026, the case remains in the solicitation period with confirmation pending.

Professional Retentions and Fee Disputes

Centier Bank objected to fee requests by former professionals, making professional compensation a contested issue in the case. The court ultimately allowed compensation on a final basis over Centier's objections.

Gutwein LLP, described in the application as former special counsel, received final allowance of $169,491.50 in fees and $243.66 in expenses, for a total of $169,735.16. The court ordered payment within 10 days of entry of the fee order. Gutwein's role as special counsel — rather than lead debtor's counsel — reflects the fact that the debtors changed legal teams during the case, with Gutwein handling litigation and transactional work during the early phases before replacement counsel took over.

Blackwell, Burke & Fowler, P.C., former debtor's counsel, received final allowance of $119,230.00 in fees and $5,907.98 in expenses. The order authorized the application of the firm's remaining retainer toward the allowed amount and directed payment of the balance after the Centier objection process was resolved. Centier's objections to both fee applications reflected the bank's broader posture of contesting estate expenses that it viewed as eroding its collateral value — the same dynamic that drove the cash-collateral negotiations.

Stretto, Inc. serves as the claims and noticing agent for the jointly administered cases, maintaining the official claims register and distributing case notifications to creditors and parties in interest.

Key Timeline

Date	Event
June 25, 2024	Debtors file chapter 11 petitions
June 26, 2024	First-day cash-collateral motion and supporting declaration filed
June 28, 2024	Court enters interim cash-collateral order after preliminary hearing
October 2, 2024	Court approves Wabash sale for $9.95 million
October 24, 2024	General claims bar date
December 23, 2024	Governmental claims bar date
February 21, 2025	Debtors seek insider DIP financing from NovaTech
April 16, 2025	DIP objections resolved by stipulation
December 16, 2025	Debtors file disclosure statement and chapter 11 plan
February 17, 2026	Court enters solicitation order and twelfth interim cash-collateral order
March 30, 2026	Ballot and objection deadline
April 6, 2026	Ballot report and cramdown motion deadline
April 20, 2026	Confirmation hearing scheduled

Frequently Asked Questions

Who is the claims agent for Maximus Supply Chain Holdings?

Stretto, Inc. serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

What is the general claims bar date?

The general claims bar date was October 24, 2024. The governmental claims bar date was December 23, 2024.

What recovery would general unsecured creditors receive under the proposed plan?

The plan projects approximately 2% recovery for general unsecured creditors, through a settlement fund of $216,713.35 distributed across an estimated $10.84 million in allowed unsecured claims. The disclosure statement contrasts this with a hypothetical chapter 7 outcome of zero recovery.

When is the confirmation hearing?

The confirmation hearing is scheduled for April 20, 2026 at 11:30 a.m. before Judge Robert E. Grant. The ballot and objection deadline is March 30, 2026, with the ballot report and any cramdown motion due by April 6, 2026.

Who would own the reorganized company?

Under the proposed plan, existing equity would be canceled and new equity in the reorganized debtor would be issued 51% to Inna Bazzi and 49% to Sam Bazzi, in exchange for their waiver of $150,000 in court-approved insider DIP financing from NovaTech Manufacturing Corporation.

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