The Painted Tree Bankruptcy — What Vendors Actually Need to Know

# The Painted Tree Bankruptcy — What Vendors Actually Need to Know

Last updated: April 29, 2026

Status as of this update: Painted Tree Boutiques announced its intent to file Chapter 7 in a vendor email on April 14, 2026. As of April 29, 2026 — fifteen days later — no public bankruptcy case number, court docket, trustee, or claims agent has surfaced for Painted Tree. The petition has been announced but, as best as we can verify from PACER and public reporting, not yet docketed. Section 2 below explains why the difference matters more than almost anything else you will read this week.

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When you need to file the actual claim, see our companion guide: How to File a Proof of Claim — Step by Step.

You are probably reading this on your phone, from a car, from a kitchen table, or from the floor of a booth you are trying to clear out before a deadline someone emailed you at 11:47 PM on a Monday.

So we will keep this useful.

This brief tells you, in plain language:

1. What actually happened (the facts that are confirmed).

2. A legal distinction that is more important than almost anything else you have been told — the difference between a company announcing bankruptcy and filing bankruptcy.

3. The single most important thing about your unsold inventory that most vendors do not know.

4. What to do this week, before the petition is filed.

5. What happens after it's filed, and how to file a claim that actually gets in front of a trustee.

6. An honest answer about what you are probably getting back in dollars.

7. What to ignore — rumors, scams, and misinformation making the rounds in Facebook groups.

8. The most likely trajectory of the case, based on how retailers like this usually unwind.

We are not lawyers and this is not legal advice. If the dollar amount you are owed matters to your family, talk to a bankruptcy attorney in your state — many offer a free 30-minute consult. Some of what is below, though, is time-sensitive enough that you need to act before you can get an appointment.

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1. What happened — the confirmed facts

On the evening of April 14, 2026, Painted Tree Boutiques sent an email to its vendor base announcing it was closing all locations, effective immediately, and intended to file for Chapter 7 bankruptcy. The previous day — April 13, 2026 — was the last day any Painted Tree store was open for business. Staff and vendors both learned through the same email.

Vendors were given a window — most have heard April 14 through April 24 — to come to their home location, retrieve their inventory, remove displays, and clear their booth.

What is confirmed from reporting across local news in Arkansas, Texas, Tennessee, Nebraska, Missouri, and a dozen other states:

• Scope: More than 60 locations nationwide, all closed overnight.
• Headquarters: Arkansas-based, with corporate operations reported in Bryant. Painted Tree's parent / controlling investor is Dale Capital Partners, a Little Rock-based investment firm. Grew fastest after 2020 by leasing former Bed Bath & Beyond, Pier 1, and Tuesday Morning spaces.
• Vendor base: Roughly 100 vendors per location. Total vendor count across the chain was in the low thousands — reporting has ranged from 4,000 to 10,000+.
• Vendor model: Booth rental, typically $150 to $1,300 per month, plus a 10 percent commission on sales. Some locations also took a smaller transaction fee.
• What vendors are losing: Month-to-date sales that had not yet been paid out. Pre-paid rent that covered weeks the store will never open again. Physical inventory still in booths. Display fixtures. Customer relationships tied to Painted Tree's point-of-sale (SimpleConsign). Small-business income that was, for many vendors, their primary paycheck.
• Documented individual losses in press coverage: One Arkansas vendor, Amy McLamb, told a local outlet she is out roughly $50,000 in inventory, unpaid sales, and fixtures. A Nebraska vendor, Jared Beauchamp, said he was owed more than $1,500 in sales that had already cleared at the register. A retired vendor in Texas, Marvin Kessler, said the income was part of how he and his wife funded their retirement.

Those three are the tip of an iceberg. If you are reading this, you are somewhere on that iceberg.

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2. The most important legal distinction — "announced" is not "filed"

This matters more than almost anything else you will read this week.

As of April 29, 2026 — the most recent verification we have done — Painted Tree has announced its intent to file Chapter 7 but the petition has not yet been filed with a bankruptcy court. There is no public case number. No trustee has been appointed. Nothing is listed on PACER. The vendor email itself acknowledges this: it tells vendors they will "have the opportunity to file a proof of claim once the filing occurs." That phrasing is the company telling you, in writing, that the case is announced, not yet filed.

Why does that distinction matter so much?

Because the moment a bankruptcy petition is filed, a federal rule called the automatic stay (11 U.S.C. § 362) snaps into effect. The automatic stay is a force field around the company. Once it is active, you — the vendor — cannot:

• Walk into a store and take back inventory without court permission.
• Sue for money you are owed.
• Send a collections letter.
• Coordinate with a landlord to seize goods.

Doing any of those things after the stay is active can expose you to sanctions, including attorney's fees and, in egregious cases, damages paid to the bankruptcy estate. The stay is not a suggestion.

Until the petition is filed, the stay does not exist. You are in a narrow window — likely days, possibly a couple of weeks — where ordinary state law still governs, which means:

• If your booth contract or the Painted Tree vendor agreement allows you to retrieve unsold goods, you can generally retrieve them.
• If the retailer is allowing retrieval (and they have announced a retrieval window through April 24), participating in that process is your best chance of getting your physical inventory back, period.
• If your booth is in a location where the landlord — not Painted Tree — is allowing access, work with the landlord. Several landlords have stepped up to help vendors retrieve goods even when Painted Tree corporate was not responsive.

What to do this week, while the stay is not yet in effect, is covered in Section 4. It is not optional.

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3. The single most important thing about your unsold inventory

Most vendors have been told some version of this: "You were a consignor. Painted Tree held your goods on consignment. When they file bankruptcy, your inventory becomes part of the bankruptcy estate and you have to stand in line with everyone else."

That is sometimes true. It is also sometimes not true. The law here is more friendly to vendors than most vendors have been led to believe.

The rule comes from the Uniform Commercial Code — UCC Article 9 — and specifically from a definition at section 9-102(a)(20). The UCC is the commercial law code adopted in every state (with small variations). Under it, a "consignment" for bankruptcy purposes has to meet several conditions, and if any one of them is missing, your goods are not consignment inventory in the legal sense and do not automatically roll into the bankruptcy estate.

The conditions the UCC looks for:

1. Was the merchandise delivered to a merchant (Painted Tree) for sale?

2. Did that merchant deal in goods of that kind under a name other than yours?

3. Was the merchant not generally known by its creditors to be substantially engaged in selling the goods of others?

4. Was each delivery of goods worth more than $1,000 at delivery?

5. Were the goods not consumer goods immediately before delivery?

6. Did the transaction create a security interest that secures the consignor's obligation?

Condition #3 is the one vendors need to understand. It is called the "generally known" exception.

Painted Tree publicly branded itself as a "curated marketplace," "Etsy come to life," and "a place where hundreds of local makers sell under one roof." That branding was on its website, in press releases, in local news coverage going back years, and on signage at every store. A strong argument exists — and courts in several jurisdictions have accepted similar arguments in similar retailer bankruptcies — that Painted Tree was generally known by its creditors to be substantially engaged in selling the goods of others.

If that is true, the transaction between you and Painted Tree is not a consignment under UCC Article 9, which means your inventory is not automatically bankruptcy-estate property. It is arguably still your property, and a trustee cannot simply sell it to pay Painted Tree's creditors.

This does not mean you automatically win. It means you have a colorable argument — a real one, not a hopeful one — that your unsold inventory belongs to you and not to the estate. Whether you can assert it successfully depends on:

• Whether you can prove what was yours (photos, SimpleConsign reports, booth records).
• Whether the trustee or a secured creditor contests it.
• Whether the relevant court accepts the "generally known" argument in your state.

The practical takeaway:

• Retrieve your physical inventory now, before the petition is filed. If you walk out with your own goods while state law still governs and retailer-sanctioned retrieval is happening, the legal ambiguity is avoided entirely.
• If you cannot retrieve goods (landlord locked you out, location already cleared, inventory commingled with other vendors' in storage), do not assume the goods are gone. Document everything, save all SimpleConsign records, photograph any remaining booth state, and get that documentation in front of a bankruptcy attorney.

You may have stronger rights than you have been told. The cost of finding out is a 30-minute consultation.

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4. What to do this week — an action list

This is the part to do today, not next week.

Retrieve physical inventory (if possible)

• Go to your booth during the retrieval window (April 14–24 for most locations).
• Bring your own boxes, bins, dollies, and help. Stores are not providing packing materials.
• Bring a printed or photographed inventory list from SimpleConsign so you can check what is missing.
• Photograph every shelf before you pack. Wide shots, then close-ups. Date the photos.
• If items are missing, make a written list of what is missing, with SKUs and dollar values, and email it to yourself the same day so the timestamp is preserved.
• If a store refuses access or a landlord is blocking retrieval, document the refusal — name of the person, date, time, what they said — and leave. Do not force entry. Forced entry creates a much bigger legal problem than the inventory is worth.

Preserve SimpleConsign data

This is the most overlooked item on the list. Once Painted Tree's SimpleConsign subscription is canceled, your historical sales data, vendor reports, customer purchase history, and itemized inventory logs may disappear from your access.

• Log into SimpleConsign today.
• Export everything. Use the built-in export tools. If there isn't a bulk export, take screenshots of every monthly report page.
• At minimum, capture:

- Lifetime sales by SKU.

- Sales for the 90 days before closure (needed for possible Section 503(b)(9) administrative claims — see below).

- Booth rent ledger.

- Commission statements.

- Any customer contact data you have access to.

• Save it to cloud storage (Dropbox, Google Drive, iCloud) and local storage. Redundancy matters.

Document what you are owed

Make a single spreadsheet. Call it PaintedTree_Claim_2026-04.xlsx. Columns:

• Category: unpaid sales / pre-paid rent / unsold inventory / fixtures / other.
• Description: what it was.
• Dollar amount.
• Evidence: filename of the document, screenshot, or photo that proves it.
• Date: when it was due or when the item was delivered.

Fill it in from your SimpleConsign exports, your bank records, and your photos. This spreadsheet is what your Proof of Claim will be built on (see Section 5).

Preserve communications

• Do not delete the April 14 email. Save a PDF copy, save it as an .eml file if you can, and forward it to yourself so you have headers and timestamps.
• Save every email, text, and social media post from Painted Tree corporate, from store managers, and from other vendors.
• If you have a written vendor agreement, find it now and save it. This contract governs what you are owed and what your rights are under state law.

Do not do the following

• Do not take other vendors' inventory, even "by accident." A stolen-inventory problem has already been reported at several Painted Tree locations and it will make its way into the bankruptcy filings.
• Do not sign a new agreement with any third party claiming to "collect your Painted Tree money on your behalf for a fee." These scams are already circulating. A trustee does not work through intermediaries. You file a Proof of Claim directly, and it's free.
• Do not chargeback a Painted Tree transaction on your credit card without talking to your card issuer first about how it interacts with bankruptcy. You may have stronger rights under chargeback rules than under bankruptcy claims — but the two interact, and a careless chargeback can weaken a later claim.

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5. After the petition is filed — how claims actually work

Once Painted Tree formally files its Chapter 7 petition, three things happen fast:

1. The automatic stay goes up. No more retrieval. No more direct communication about money owed.

2. A trustee is appointed by the U.S. Trustee Program, usually from a regional panel of bankruptcy trustees. The trustee's job is to liquidate whatever assets the estate has and distribute proceeds according to a priority ladder set by federal law.

3. A case number is issued and the case appears on PACER (the federal court records system). The trustee's name, contact information, and court will be listed.

Within a few weeks of filing, creditors receive a Notice of Chapter 7 Bankruptcy Case that includes a deadline for filing a Proof of Claim. For voluntary Chapter 7 cases, the deadline is set by Federal Rule of Bankruptcy Procedure 3002 at 70 days after the order for relief (which is the filing date in a voluntary case). Governmental units get 180 days.

Filing a Proof of Claim — the right way

A Proof of Claim is a single federal form — Official Form 410 — that tells the trustee how much you are owed, what category the claim falls into, and what evidence backs it up. Filing it is free. You can file it online through the bankruptcy court's electronic claims system (every district publishes a link), by mail, or in person at the clerk's office.

The form is not complicated. The work is in the attachment.

When you file, attach:

• Your PaintedTree_Claim_2026-04.xlsx spreadsheet.
• Your vendor agreement.
• Copies of the SimpleConsign exports that prove each line item.
• Any emails or texts that acknowledge amounts owed.
• A written statement — one or two pages — that explains the categories, totals, and the "generally known" argument if you are asserting ownership of unretrieved inventory.

Priority classes — not all claims are equal

The distribution priority ladder in Chapter 7 has several rungs. From top to bottom:

1. Secured creditors — banks, equipment lenders, and anyone with a perfected lien. They get paid first, from the asset the lien attaches to.

2. Administrative expenses — the trustee's fees, the trustee's lawyers, and certain post-petition operating costs. This includes Section 503(b)(9) claims, which is the rung vendors need to know about.

3. Priority unsecured claims — limited categories like recent employee wages and certain taxes.

4. General unsecured claims — what most vendors will be. This is also where unpaid sales and the "owed-to-you" side of unsold inventory end up if the generally-known argument fails.

5. Interest on unsecured claims.

6. Equity holders (owners of Painted Tree). Basically never paid anything in a Chapter 7.

Section 503(b)(9) gives administrative-expense priority (rung 2) to the value of goods received by the debtor in the ordinary course of business during the 20 days before the petition date. This is the single most valuable provision for vendors. If you dropped off inventory in the final three weeks before the petition is filed, the value of those specific goods may qualify for rung 2 treatment — which typically recovers a meaningful percentage even when general unsecured claims recover zero.

To preserve a 503(b)(9) claim, you need delivery records dated within that 20-day window. SimpleConsign logs and booth drop-off records are the key evidence. This is another reason the data preservation step in Section 4 is not optional.

The 341 meeting

Roughly 21–40 days after filing, the trustee holds a Section 341 meeting of creditors. It is a short, procedural meeting — usually by phone or video — where the trustee questions Painted Tree's principals under oath about assets, liabilities, and transactions. Creditors may attend and ask questions.

Most vendors do not need to attend. If your claim is significant (five figures or more), your attorney may attend or submit written questions. Either way, the transcript and minutes become part of the case record and are worth reading later.

No-asset notice

If the trustee concludes there are no non-exempt assets to distribute, the court issues a no-asset notice under Rule 2002(e). In that situation, creditors are told not to file a Proof of Claim at all unless and until the court later indicates assets have been found. Keep an eye on the docket. If a no-asset notice issues and then is later withdrawn (which happens when a trustee recovers money through clawback or litigation), a new bar date is set.

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6. What are you actually going to get back? An honest answer.

You want a number. Here is how to think about the number realistically.

The base rate is low

According to U.S. Trustee Program data published across multiple years, roughly 92–96 percent of Chapter 7 business cases are no-asset cases. In a no-asset case, general unsecured creditors recover zero. Most Chapter 7 vendor claims end up in that bucket.

The asset-case range

In the 4–8 percent of Chapter 7 cases where the estate does have assets to distribute to unsecured creditors, the median recovery for general unsecured claims tends to land in the 23 to 27 percent range — meaning a vendor owed $10,000 might receive $2,300 to $2,700, often 12 to 24 months after filing. Some cases recover more, many recover much less.

The nearest comp is Tuesday Morning

Tuesday Morning Corporation — a national home-goods retailer with a similar physical footprint and a similar tenancy pattern — filed Chapter 11 in 2020, emerged, refiled in early 2023, and ultimately wound down through a combination of asset sales, intellectual property sales, and clawback actions. Specific dollar recoveries to general unsecured creditors varied by claim class and are publicly recorded in the case docket.

Tuesday Morning is a reasonable comp because:

• Similar size (hundreds of locations vs. Painted Tree's 60+).
• Similar demographic and retail positioning.
• Similar cause of failure (long decline, supply chain stress, cash crunch).
• Similar Chapter 7 outcome profile.

The lesson from Tuesday Morning: some recovery is possible, it takes 18–36 months from filing to distribution, and vendors who filed clean Proofs of Claim with backing evidence received payouts while vendors who ignored the deadlines received nothing.

What recovery probably looks like for you

A realistic, non-legal-advice projection for a typical Painted Tree vendor:

• Best case: You retrieve most of your unsold inventory during the April 14–24 window. You file a 503(b)(9) administrative-expense claim for the value of inventory delivered in the 20 days before the petition and a general unsecured claim for the rest. If the case turns out to be an asset case, you recover 20–40 percent of your 503(b)(9) portion within 18 months and a token 5–15 percent of your general unsecured portion. Physical retrieval is the big win.
• Middle case: You retrieve most inventory. You file claims. The case is a no-asset case. You recover nothing in dollars but you kept the inventory, which you can now sell elsewhere.
• Worst case: You cannot retrieve inventory. The case is a no-asset case. You lose everything not already paid to you.

The difference between the best case and the worst case is almost entirely determined by what you do in the next 10 days.

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7. What to ignore — rumors, scams, and misinformation

Several patterns are already making the rounds in vendor Facebook groups and should be actively filtered:

• "A class action lawsuit is being organized, join now." Class actions and bankruptcy do not mix well. Once the stay is up, class-action plaintiffs are automatically stayed, and individual Proofs of Claim are the mechanism that works. Be skeptical of anyone recruiting members for a class action against Painted Tree post-petition.
• "A company will collect your money for 30 percent." Debt-collection intermediaries cannot move faster than the trustee and cannot give you anything the trustee would not already give you. You do not need them. The Proof of Claim is a free form.
• "You can sue the owners personally." Painted Tree Boutiques was an LLC. The corporate veil protects individual owners from personal liability except in narrow circumstances (fraud, commingling, personal guarantees). If you believe you have a personal-liability claim, talk to a lawyer, but do not let anyone tell you this is a simple path to recovery.
• "Sign this new agreement for a warehouse to store your inventory." Several third-party storage and consignment operators have reached out to Painted Tree vendors offering to "take over" storage for a fee. These offers are not coordinated with the bankruptcy process and can complicate your claims. If you need storage, rent a climate-controlled unit from a national operator under your own name.
• "There will be a buyer for the company and the stores will reopen." Rumors of a buyer circulated within 72 hours of the April 14 announcement. No buyer has been publicly named, and the process a buyer would have to go through (bid in the Chapter 7 sale process or purchase assets from the trustee) takes months, not days. Do not make decisions based on a store reopening.
• "The email was a test / a scam / not real." It was real. It came from Painted Tree corporate. The stores closed on April 13. This one is worth disbelieving because you want to disbelieve it, which is why we are flagging it.

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8. Likely trajectory — where this case probably goes

Based on how comparable retail bankruptcies unfold, here is the most plausible forward path:

Weeks 1–4 (April 14 – mid-May 2026). The petition is filed within this window. A trustee is appointed. The automatic stay goes up. Stores are officially closed. Landlord possession actions begin where landlords have not already cleared vendors' goods. Remaining Painted Tree inventory and fixtures are inventoried by the trustee. Vendor retrieval essentially ends when the stay goes up.

Weeks 4–12 (mid-May – mid-July 2026). The 341 meeting of creditors is held. Notice of the bar date for Proofs of Claim is sent to all listed creditors. If no-asset status is designated, the court issues a Rule 2002(e) notice. The trustee begins investigating potential clawback actions (preferences and fraudulent transfers in the 90 days to two years before the petition).

Months 3–12 (July 2026 – April 2027). The trustee sells any remaining assets — POS equipment, fixtures not reclaimed, leasehold interests (unlikely to have value), the Painted Tree brand name and IP, and the vendor/customer databases. IP sales are the wildcard: a competitor might pay real money for the "Painted Tree" name, the customer list, and the vendor relationships. Tuesday Morning's IP sold for meaningful dollars in its Chapter 7.

Months 6–24 (October 2026 – April 2028). The trustee pursues clawback litigation against insiders, affiliates, and large creditors who received preferential transfers. These recoveries are the single largest source of dollars for general unsecured creditors in Chapter 7 cases of this profile.

Months 12–36 (April 2027 – April 2029). If there are meaningful assets, the trustee files a proposed distribution plan. Creditors get a chance to object. Distributions are made in order of priority. Vendors whose claims were filed correctly get a check. Vendors whose claims were not filed or were defective get nothing.

Months 24+ (post-April 2028). The trustee files a final report and the case closes. Unresolved claims are permanently discharged. If you had not filed by the bar date, you are done.

Two wildcards worth tracking

• A conversion to Chapter 11 or a going-concern sale. Unlikely given that stores are already closed, but a well-funded buyer could theoretically acquire the brand and reopen selective locations. Monitor the docket for any "Motion to Convert" filings.
• A landlord-initiated sale of abandoned goods. In some states, a landlord can claim a lien on goods left on the premises after lease termination. If you did not retrieve inventory and the landlord claims a lien, that creates a secondary dispute with you, the landlord, and the trustee all with competing claims. This is another reason retrieval matters now.

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9. You are not a booth. You are a business.

Here is the thing Painted Tree told you by accident.

You are not a booth. You were never a booth. You are a business. You have a product people drove across town to buy. You have a customer base that is, right now, searching online for the thing they used to find inside a Painted Tree. You have a brand — your brand, not Painted Tree's — and people recognize it.

The painful part of the last week is real. The money you are out is real. The inventory you cannot retrieve, if it stays irretrievable, is a real loss. We are not going to pretend otherwise.

But the thing a booth took from you — direct access to your customer, the email list, the website, the SEO, the ability to raise prices without a middleman's permission — a booth closing gives back.

When you are ready, this is what to do next:

1. Save every single piece of data you can from Painted Tree's systems this week. That data is yours.

2. Build a direct-to-customer presence somewhere that you own. A website at your own domain. An email list you control. A payment processor that pays you directly. A social presence where your customers can find you.

3. Tell your customers where you went. A short, human note. Not a sales pitch. Just: here is what happened, here is where I am now, thank you for being part of this.

A vendor who walked out of Painted Tree on April 14 with a box of inventory, a SimpleConsign export, and a customer list can be fully operational — with a website accepting orders and a way for customers to find them again — in seven to fourteen days. That is not marketing copy. That is what the vendors who have already done it this week will tell you.

The Painted Tree closed. The tree you painted is still yours.

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A short disclaimer

This brief is information, not legal advice. Bankruptcy law interacts with state law, the details of your vendor agreement, and the specific facts of your booth operation in ways that only an attorney licensed in your state can fully evaluate for you.

If any of the following describe you, call a bankruptcy attorney in your state this week:

• You are owed more than $10,000.
• You had a multi-booth arrangement or were on a written contract with unusual terms.
• You have a personal guarantee signed by someone associated with Painted Tree.
• You believe a specific landlord or store manager is actively preventing lawful retrieval.
• You are considering any form of lawsuit, chargeback beyond a simple credit card dispute, or class action.

Many bankruptcy attorneys offer free 30-minute consultations. The American Bar Association and your state bar both maintain lawyer referral services. The National Association of Consumer Bankruptcy Attorneys (NACBA) publishes a free directory.

You do not need to figure this out alone. You do not need to figure it out this afternoon. You do need to do the retrieval, the data saving, and the documentation this week.

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Sources

• Local news reporting on Painted Tree Boutiques closures, April 14–21, 2026: KARK (Little Rock, AR), KENS-5 (San Antonio, TX), Journal Star (Lincoln, NE), The Commercial Appeal (Memphis, TN), and additional affiliate coverage across TX, MO, OK, TN, AR, and NE.
• Uniform Commercial Code, Article 9, §§ 9-102(a)(20), 9-319, 9-505 (state-adopted versions vary slightly).
• Uniform Commercial Code, Article 2, §§ 2-326, 2-401.
• 11 U.S.C. § 362 (automatic stay).
• 11 U.S.C. § 503(b)(9) (administrative expense priority for goods delivered in 20 days pre-petition).
• 11 U.S.C. § 726 (priority of distribution in Chapter 7).
• Federal Rule of Bankruptcy Procedure 3002 (time for filing Proofs of Claim).
• Federal Rule of Bankruptcy Procedure 2002(e) (no-asset notice).
• Official Form 410 (Proof of Claim).
• U.S. Trustee Program annual reports (asset-case vs. no-asset-case distribution data).
• Tuesday Morning Corporation, Chapter 11 case no. 20-31476 (Bankr. N.D. Tex. 2020), later converted to Chapter 7, final distribution report 2023.
• American Bankruptcy Institute journal articles on retailer consignment disputes (the Sports Authority, Borders, and Filene's Basement bankruptcies are the most commonly cited precedent).

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If you forward this to another vendor, the most useful thing you can tell them is: read Sections 3 and 4 today, save your SimpleConsign data today, and find a bankruptcy attorney in your state before next week. That is the whole game.