Judge tossed plus-sized retailer's Chapter 11, liquidation likely

Core Viewpoint - The authority to file for Chapter 11 bankruptcy is crucial, as improper filings can be challenged, affecting creditors' recovery and consumer confidence in the company [1][2]. Group 1: Legal Authority and Bankruptcy Filings - Bankruptcy filings must be submitted by individuals with full corporate authority, and unauthorized filings can be contested in court [1]. - Courts have differing opinions on the enforceability of provisions in organizational documents that restrict bankruptcy filings, but there is precedent for dismissing cases lacking proper board approval [2]. - A recent case in Illinois highlighted that a Chapter 11 filing was dismissed because it lacked consent from an independent director as required by the loan agreement [3]. Group 2: Ashley Stewart, Inc. Case - Ashley Stewart, Inc. filed for Chapter 11 protection on December 17, 2023, in New Jersey, aiming to contest a disputed foreclosure sale of its assets [4]. - The court invalidated Ashley Stewart's bankruptcy filing due to insufficient corporate approval, emphasizing the necessity of proper authorization before seeking bankruptcy protection [5]. - Ashley Stewart reported assets between $10 million to $50 million and liabilities between $50 million to $100 million, indicating potential funds for unsecured creditors [6].