TM36 and StopLoss Seek Equipment Sale Ahead of Liquidation Plan
On October 9, 2026, TM36, LLC and the StopLoss debtors sought approval to sell their recovered machinery, equipment, vehicles, and other tangible property through private sales and an online auction. They propose retaining Plant & Machinery, LLC and PPL Group, LLC to conduct the sale while preparing a liquidation plan. The proposed auction would occur within 60 days after an approval order. Equipment sale motion, pp. 1–6
The debtors acknowledge that they have no equity in the equipment. Their stated objective is to obtain higher proceeds and reduce secured creditors’ unsecured deficiency claims. The proposed sale competes with Recovery Logistics Finance, LLC’s request to repossess and sell its collateral. Equipment sale motion, pp. 2–3, 8–10
The group’s business involved emergency response and property restoration services. StopLoss, LLC acted as a holding company, while StopLoss Specialists, LLC entered into contracts for the business. The court’s October 7 opinion distinguishes the January involuntary case against StopLoss, LLC from the remaining debtors’ March voluntary filings. Memorandum opinion, pp. 1, 4
Case record
Public case facts. Searchable documents available. Full docket access requires Pro.
| Debtor(s) | TM36, LLC; StopLoss Specialists, LLC; StopLoss, LLC; StopLoss Response Services, LLC; StopLoss Logistics, LLC |
| Court | United States Bankruptcy Court for the Southern District of Texas, Houston Division |
| Case Number | 26-90386, jointly administered |
| Petition Date | March 5, 2026, for the voluntary cases; January 20, 2026, for the involuntary case against StopLoss, LLC |
Sources: Equipment sale motion, pp. 1–3; memorandum opinion, p. 4.
Coordinated auction or lender repossession
Recovery Logistics Finance filed its stay-relief motion on September 21, seeking authority to repossess and sell equipment securing its loan. The lender reports a petition-date balance of $11,109,145.03, including principal, interest, fees, and expenses. It argues that the equipment lacks equity and is unnecessary for an effective reorganization. Stay-relief motion, pp. 2–6
The debtors counter that recovering equipment from Texas and Louisiana required two turnover proceedings and took until September. In their October 9 response, they say substantially all recovered equipment is under their control at a San Antonio warehouse and neighboring yard. They argue that marketing it together to restoration-industry buyers would produce better results than separate creditor sales. That price advantage is the debtors’ position; auction results remain undetermined. Debtors’ response, pp. 1–4
Insurance is also disputed. The lender alleges that the equipment is uninsured and exposed to loss. The debtors respond that commercial inland marine, auto, excess liability, and commercial general liability policies have been in place since April 10, 2026, with one-year terms. Stay-relief motion, pp. 5–6; debtors’ response, p. 2
The lender’s motion schedules its hearing for October 15 at 11:15 a.m. The debtors ask the court to consider their sale proposal at that hearing as an alternative to repossession. Stay-relief motion, p. 1; equipment sale motion, pp. 9–10
Proposed sale economics
The attached asset sale agreement makes the engagement and sales subject to court approval. It compensates the sale agents through buyer premiums and permits sale expenses to be deducted from proceeds. Proposed asset sale agreement, pp. 13–14
| Term | Proposed treatment |
|---|---|
| Seller commission | No commission from the debtors’ share of proceeds |
| Auction buyer premium | 17% of the hammer price: 14% retained by the sale agents and 3% by service providers, unless otherwise negotiated |
| Private-sale buyer premium | 17%, retained entirely by the sale agents |
| Estate rebate | 5% of gross proceeds above $750,000, paid from collected buyer premiums |
| Expenses | Deducted from gross proceeds; amounts above $30,000 require prior written approval from the chief restructuring officer |
| Auction timing and reserve | Within 60 days after approval; assets offered without reserve |
| Remittance | Gross proceeds plus any rebate, less expenses; payment due after all assets are removed |
The $750,000 figure is a rebate threshold, not a minimum purchase price or proceeds forecast. The agreement defines gross proceeds as hammer and private-sale prices actually paid, excluding buyer premiums and sales taxes. The estate would still bear sale expenses deducted from those proceeds. Proposed asset sale agreement, p. 14
A major claim dispute stays in bankruptcy court
The unsecured claims pool also depends on a dispute with Insured Advocacy Group, LLC, which purchased restoration-project receivables under a factoring agreement. In an October 7 memorandum opinion, the court denied IAG’s motion to compel arbitration of the debtors’ claim objection. IAG filed an unliquidated claim for an unknown amount; the court estimated that its repurchase demands approached $10 million, with additional requests for attorney’s fees and fraudulent-inducement damages. Memorandum opinion, pp. 1–4, 16
The court rejected the debtors’ arguments that the arbitration provision was illusory and that IAG had waived its arbitration rights. It nevertheless exercised discretion to retain the claim objection, citing centralized claims administration, potential delay, the creditors’ committee’s participation, and the risk of inconsistent proceedings. The opinion determines the forum for the dispute; it does not allow or disallow IAG’s claim. Memorandum opinion, pp. 9–16
Liquidation recoveries remain unresolved
In the October 9 filings, the debtors say they are preparing a liquidation plan and believe their litigation claims can support payment of unsecured claims in full. That is their assessment, rather than an established recovery. Equipment proceeds would affect deficiency claims, while litigation outcomes and claim allowances would determine the remaining funds and obligations. Equipment sale motion, p. 8; debtors’ response, pp. 3–4
This account covers the sale request and related disputes reflected in filings through October 9, 2026. The immediate unresolved issue is whether the court will authorize the coordinated sale or permit Recovery Logistics Finance to pursue repossession. The proposed sale agreement supplies a process and cost structure; creditor recoveries still depend on the prices obtained and the resolution of litigation and claims. Equipment sale motion, pp. 8–10, 13–14; debtors’ response, pp. 3–4
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. See the disclaimer.