Tuesday Morning Corporation

Tuesday Morning Corporation moved to Chapter 7 liquidation under the August 1, 2023 conversion order Dkt. 1510. The resulting path is administration of the remaining estate and creditor claims, following a Chapter 11 effort to preserve a smaller retail business through store closures and postpetition financing.

Tuesday Morning Corporation’s bankruptcy proceeding was converted from Chapter 11 to Chapter 7 on August 1, 2023, under the conversion order Dkt. 1510, putting the estate on a liquidation path. The company and its subsidiaries had filed Chapter 11 petitions on February 14, 2023, seeking to preserve a smaller business through a sale or reorganization.

The off-price home and lifestyle retailer entered bankruptcy with 464 stores and a strategy to retain approximately 200 profitable locations while closing underperforming stores. In his February 15 first-day declaration Dkt. 65, CEO Andrew Berger attributed the liquidity crisis to operational difficulties, supply-chain disruption and rising costs, compounded by prepetition ABL lenders increasing reserves from $10 million to $30 million. He reported that full-chain store-closing sales had begun on January 19, 2023, and that the lenders accelerated obligations and terminated borrowing capabilities on February 7. Management sought bankruptcy financing that would permit a sale or reorganization rather than require immediate company-wide liquidation.

The February 16 interim DIP order Dkt. 112 authorized borrowing of up to $15 million under the proposed Invictus term-loan facility of up to $51.5 million. That authorization became contested: the March 6 reconsideration order Dkt. 401 granted in part and continued in part motions challenging the initial interim financing order. The court subsequently authorized a 1903 DIP ABL revolving facility with a $12.5 million commitment in the April 6 financing order Dkt. 771.

By June 16, the financing framework supported a wind-down: the final cash-collateral order Dkt. 1221 authorized limited use of cash collateral under a Final Wind Down Budget and granted adequate protection. The August 1 conversion then shifted the proceeding to Chapter 7 estate administration. On August 2, the unsecured creditors’ committee filed its withdrawal notice Dkt. 1517, withdrawing its motion to vacate or reconsider the original interim DIP order.