Painted Tree: Chapter 7 Liquidation of 65-Debtor Marketplace Chain

Painted Tree Houston, LLC and 64 affiliated marketplace operators filed voluntary chapter 7 petitions on April 28, 2026, in the U.S. Bankruptcy Court for the Southern District of Texas (Houston Division), with the lead case docketed as 26-32918 before Hon. Jeffrey P. Norman. Christopher R. Murray was appointed chapter 7 trustee for the consolidated estates. The petitions followed an abrupt nationwide closure of the Painted Tree Boutiques marketplaces on April 24, 2026 — four days before filing — with possession of the leased storefronts returned to landlords before the bankruptcy estates ever came into existence.

The case is a trustee-led liquidation, not a reorganization. There is no debtor-in-possession, no DIP financing, and no going-concern sale. The trustee is rejecting 61 storefront leases as of the petition date, abandoning residual fixtures and signage, and establishing modified notice procedures to reach approximately 11,000 creditors across 65 jointly administered estates — a population that includes the individual booth-rental vendors the debtors called "Shop Owners." The trustee's professional team and the consolidated noticing scheme were the most active threads on the early docket; substantive claims work, avoidance litigation, and the actual Section 341 meeting have not yet appeared on the record.

Debtor(s)	Painted Tree Houston, LLC (65 jointly administered entities)
Court	U.S. Bankruptcy Court, Southern District of Texas (Houston Division)
Case Number	26-32918
Petition Date	April 28, 2026
Judge	Hon. Jeffrey P. Norman
Chapter 7 Trustee	Christopher R. Murray
Claims & Noticing Agent (Proposed)	Stretto, Inc.
Service Address	One Allied Drive, Suite 300, Little Rock, AR 72202

Open the public case profile for docket context, hearings, advisors, and plan updates.

Painted Tree's Shop Owner Marketplace Model

Painted Tree operated indoor "marketplace" retail locations under a curated booth-rental model. Each store was a leased big-box footprint subdivided into hundreds of vendor spaces; the vendors — referred to in the court papers as Shop Owners — paid Painted Tree for booth or shelf space and sold their own merchandise directly to consumers. The corporate family consisted of Painted Tree Marketplace, LLC as the parent operating company, 64 LLC affiliates each tied to an individual market location, and a staffing affiliate, PTM Staffing, LLC, all sharing a service address of One Allied Drive, Suite 300, Little Rock, Arkansas.

The business reached a national footprint before closing. News coverage tracked closures across Texas, North Carolina, Arizona, Tennessee, and the company's Arkansas home market, with six Houston-area locations among the affected stores. The full list of affiliated debtors tied to those markets is identified in the emergency motion for joint administration.

Prepetition Shutdown and the April 24 Store Closures

Painted Tree stopped operating before it filed. The trustee's omnibus motion to reject leases states that the debtors ceased store operations on April 24, 2026 and turned over possession of the retail premises to the landlords prepetition. By the time the chapter 7 petitions were filed on April 28, the storefronts were already dark and the booth-rental vendor relationships had been effectively terminated, with vendors directed to retrieve their merchandise from the closed locations.

Local reporting from Tyler, Texas described Shop Owners arriving to recover unsold inventory and unpaid sales proceeds, and Phoenix-market coverage documented stolen goods and disordered handoffs at the closing marketplaces. Coverage from the company's Arkansas home market reported that Painted Tree told vendors directly it intended to file for bankruptcy at the time of the shutdown, and national wires identified the filing as a chapter 7 liquidation rather than a reorganization.

The chapter 7 record does not contain a first-day declaration of the type typically filed in a chapter 11 case. The trustee has not yet placed schedules, a statement of financial affairs, or a comprehensive narrative of the prepetition causes of distress on the docket. The trustee characterizes the estates as having "limited resources" and constrained cash, and has framed the administration around lease rejection, modified noticing, and abandonment of low-value property rather than a going-concern marketing process.

Joint Administration of 65 Painted Tree Debtors

On May 7, 2026, the trustee filed an emergency motion for joint administration consolidating procedural management of all 65 Painted Tree chapter 7 cases under lead case In re Painted Tree Houston, LLC, Case No. 26-32918 (Jointly Administered). Judge Norman entered the joint administration order the same day, directing that all future pleadings be docketed under a consolidated caption and that any related cases not previously assigned to him be transferred to his docket.

The order is procedural only and does not effect substantive consolidation of the debtors or their estates. Each affiliate's assets and liabilities remain legally separate; what changes is the noticing and case-administration burden, with one consolidated docket replacing what would otherwise be 65 parallel chapter 7 dockets across one judicial district.

Modified Notice Procedures for Approximately 11,000 Creditors

The 65-debtor consumer-creditor population put unusual pressure on noticing. On May 18, 2026, the trustee filed an emergency motion for modified notice procedures, which Judge Norman granted by order the same day. The motion reported that the estates collectively involve approximately 11,000 creditors across 65 debtor entities, and that running the standard mailing protocol — separate notices for each debtor to every creditor on each entity's matrix — would cost at least $125,000, more than the estates' available cash.

The approved procedures authorize a single consolidated one-page creditor notice plus a case-specific website hosted by the proposed claims agent, in lieu of duplicative per-debtor mailings. Future notices and proofs of claim are routed through the same consolidated channel. The trustee also flagged a privacy rationale alongside the cost argument: the debtors' Shop Owners are individuals whose addresses are redacted in the public schedules, and the trustee asked the court to limit the dissemination of those personal details by routing notice through a consolidated mailing and a managed claims website rather than open per-creditor service.

The trustee proposes Stretto, Inc. as the official claims and noticing agent. The modified-notice motion quotes Stretto's cost at approximately $25,000 to mail the consolidated notice package to roughly 11,000 creditors, plus approximately $5,000 to establish a case website with online claim-filing capability. Stretto's connection disclosure identifies Regions Bank as both one of its lenders and a vendor of the Painted Tree debtors — a disclosure rather than a characterization of Regions Bank as a Painted Tree secured lender. Stretto's avoidance-action conflict list, which catalogs current, former, or potential defendants in clawback actions in unrelated Stretto matters, includes AT&T, Bank of America, N.A., Comcast, J.P. Morgan Chase & Co., Oracle America, Inc., and United Rentals, Inc. — entities that overlap with Painted Tree's trade-vendor universe.

The general claims bar date had not been fixed on the reviewed record. The proposed creditor notice form filed with the motion carries a "TO BE INSERTED" placeholder for the bar date, meaning the deadline is contingent on the noticing agent's mailing rather than already set. The Colorado Department of Revenue voluntarily withdrew Claim 14 on May 28, 2026 — the earliest noted claim activity on the consolidated docket.

Omnibus Rejection of 61 Storefront Leases

On May 15, 2026, the trustee filed a single omnibus motion to reject 61 retail storefront leases as of the petition date and to abandon remaining personal property — fixtures, signage, and similar items — under Section 554 as property of inconsequential value or burdensome to the estates. The motion is scheduled for hearing on June 16, 2026 at 1:30 PM in Courtroom 403 before Judge Norman. The motion separates affected premises into two schedules: Schedule 1 lists currently in-force unexpired leases proposed for rejection, and Schedule 2 lists leases already terminated prepetition, which the motion identifies for abandonment-notice purposes only. The trustee's stated rationale is straightforward: stores ceased operating prepetition on April 24, 2026, the trustee does not intend to operate any store, and continued possession yields no benefit to the estates while imposing administrative-expense exposure for postpetition rent. Removal and storage costs for the fixtures and signage would exceed their value to the estates, supporting abandonment in place.

For lease-rejection damages claims, the omnibus rejection motion sets the deadline as the later of the general claims bar date or 30 days after entry of the lease-rejection order. Because the general bar date is not yet fixed, the order date provides the operative anchor for landlord rejection-damages claims even if the consolidated creditor notice does not issue immediately.

Trustee Professionals and Chapter 5 Litigation Scope

Trustee Christopher R. Murray assembled a Texas-based professional team to administer the consolidated estates. On May 13, 2026, the trustee filed an application to employ Nathan Sommers Gibson Dillon PC as general counsel, with Iain L. C. Kennedy as lead counsel at $600 per hour. The retention is hourly with no retainer and is effective as of the April 28, 2026 petition date. The retention application contemplates pursuing chapter 5 avoidance actions, claim analysis and objections, insider-transaction analysis, exemption examination, and asset turnover litigation. No adversary proceedings had appeared on the docket as of May 28, 2026.

On May 14, 2026, the trustee filed an application to employ Munshi, Nguyen & Co. CPA, PC as accountant, effective May 12, 2026, to handle federal and state tax returns and accounting advice for the estates. The 2026 partner billing rates are $375 for D. Munshi and $250 for T. Nguyen; associates bill at $110 to $225 and staff at $75 to $125, with no retainer. Munshi, Nguyen disclosed a prior representation of trustee Christopher R. Murray in unrelated cases but reported no connections to the debtors.

Two out-of-state attorneys, Jennifer D. Raviele and Andrew J. Matott, were admitted pro hac vice on May 12, 2026, expanding the trustee-side bench beyond local counsel.

Key Timeline

Retail media reported the closures as chapter 7-bound before petitions were filed. Administrative milestones through May 28, 2026:

Date	Event
2026-04-24	Painted Tree stores cease operations; possession of premises returned to landlords prepetition
2026-04-28	65 Painted Tree debtors file voluntary chapter 7 petitions in S.D. Tex.; Christopher R. Murray appointed trustee
2026-05-07	Trustee files emergency motion for joint administration; Judge Norman enters joint administration order same day
2026-05-12	Pro hac vice admissions granted for Jennifer D. Raviele and Andrew J. Matott; effective date of trustee's accountant retention
2026-05-13	Trustee files application to employ Nathan Sommers Gibson Dillon PC as general counsel
2026-05-14	Trustee files application to employ Munshi, Nguyen & Co. CPA, PC as accountant
2026-05-15	Trustee files omnibus motion to reject 61 storefront leases and abandon property
2026-05-18	Trustee files emergency motion for modified notice procedures; Judge Norman grants same day
2026-05-28	Colorado Department of Revenue withdraws Claim 14
2026-06-16 (scheduled)	Hearing on omnibus lease-rejection motion and trustee professional retentions, Courtroom 403, Houston

Frequently Asked Questions

What chapter did Painted Tree file under?

Painted Tree Houston, LLC and 64 affiliated debtors filed voluntary chapter 7 petitions on April 28, 2026 in the U.S. Bankruptcy Court for the Southern District of Texas. The cases are jointly administered as a liquidation rather than a chapter 11 reorganization, with no debtor-in-possession and no going-concern sale on the reviewed docket.

Who is the trustee for the Painted Tree chapter 7 cases?

Christopher R. Murray serves as the chapter 7 trustee for the consolidated Painted Tree estates. He has retained Nathan Sommers Gibson Dillon PC (Iain Kennedy as lead at $600 per hour) as general counsel and Munshi, Nguyen & Co. CPA, PC as accountant for the estates.

Who is the claims agent for Painted Tree?

Stretto, Inc. is the proposed claims and noticing agent in the consolidated Painted Tree chapter 7 cases. Stretto's role is approved as part of the trustee's emergency modified-notice procedures and includes mailing the consolidated creditor notice and hosting a case website for filing proofs of claim.

When is the claims bar date in the Painted Tree cases?

The general claims bar date had not been fixed on the reviewed record. The proposed consolidated creditor notice approved with the modified-notice order carries a "TO BE INSERTED" placeholder for the bar date, meaning the deadline will be set when the noticing agent issues the consolidated notice. For lease-rejection damages, the deadline is the later of the general bar date or 30 days after entry of the lease-rejection order.

How many Painted Tree stores are being closed?

The trustee's omnibus motion seeks to reject 61 retail storefront leases as of the petition date and abandon remaining personal property at those locations. Painted Tree stores ceased operating on April 24, 2026 — four days before the chapter 7 filing — with possession of the leased premises returned to landlords prepetition.

For more bankruptcy case coverage, visit the ElevenFlo bankruptcy blog.