Continental American Corporation (CAC), the world's oldest latex balloon manufacturer, has filed its first amended disclosure statement outlining a liquidation plan in the U.S. Bankruptcy Court for the District of Kansas. The plan, submitted on April 23, 2025, details how the company will distribute remaining assets to creditors after selling its multinational business operations last year.
The Wichita-based company, which operated plants across the United States with additional locations in Canada, Mexico, Brazil, Australia, and the United Kingdom, filed for Chapter 11 bankruptcy protection on September 22, 2023, alongside its subsidiary Pioneer National Latex, Inc. (PNL).
"CAC owned and operated a multinational balloon business, directly and through its subsidiaries," the disclosure statement explains. "The Business was the oldest latex balloon company in the world, headquartered in Wichita, Kansas."
According to the filing in Case No. 23-10938-MLH, the company sold substantially all of its assets on June 28, 2024, to Pioneer Blue Balloon, LLC and Pioneer Red Balloon, LLC, entities that were assignees of White Oak, CAC's primary secured creditor. The sale followed an auction process where no competing bids were received against White Oak's credit bid.
Daniel A. Flynn, CEO of Continental American Corporation, signed the disclosure statement, which outlines the proposed treatment for various classes of creditors. The plan creates a Liquidating Trust to pursue certain remaining legal claims and distribute proceeds to creditors according to bankruptcy priorities.
"The primary objectives of the Plan are to: (i) transfer the Trust Assets to the Liquidating Trust, which will be charged with liquidating them, reconciling Claims, prosecuting Remaining Actions for the benefit of Creditors and making distributions to Creditors and (ii) maximize value to all Creditor groups on a fair and equitable basis under the priorities established by the Bankruptcy Code," the document states.
The disclosure statement reveals significant financial liabilities, including approximately $23.7 million in general unsecured claims, $191,768 in priority claims, and $677,642 in administrative claims. White Oak maintains a super-priority administrative claim estimated at $1 million.
Recovery for unsecured creditors appears uncertain. The filing notes that "unsecured non-priority claims will not receive a distribution until, at the very least, all allowed administrative and priority claims have been paid." It adds that "no analysis has been made as to an estimate of what final allowed administrative claims may be, or what distribution may ultimately be made to allowed unsecured claims."
One of the primary assets potentially available for creditor recovery is litigation claims. The disclosure statement indicates CAC made transfers of approximately $15.78 million in the 90 days before bankruptcy and an additional $2.08 million to insiders in the year before filing, some of which may be recoverable through avoidance actions.
White Oak purchased most of the company's legal claims as part of the asset sale but agreed to release certain avoidance actions back to the debtor. These remaining actions will be transferred to the Liquidating Trust for potential pursuit and recovery.
"The recoveries, if any, from any litigation brought by the Liquidating Agent will depend on many factors, which cannot be predicted at this time," the document cautions.
The bankruptcy court has scheduled a confirmation hearing on the liquidation plan for June 12, 2025, at 10:30 a.m. Creditors eligible to vote on the plan must submit their ballots by June 5, 2025, and any objections to the plan must be filed by the same date.
David Prelle Eron of Prelle Eron & Bailey, P.A., who represents the debtors, is managing the voting process for the plan. The Official Committee of Unsecured Creditors is represented by Sharon L. Stolte of Sandberg Phoenix & von Gontard, P.C.
The liquidation plan will terminate the Committee upon effectiveness and consolidate authority in a Liquidating Agent who will administer remaining assets, pursue litigation claims, reconcile creditor claims, and make distributions according to bankruptcy priorities.
In analyzing alternatives to the plan, the debtor argues that conversion to Chapter 7 would result in additional costs that would further diminish potential recoveries for creditors, while dismissal of the case would likely leave creditors with little chance of recovery.
This article was prepared using Stretto Conductor, our new AI-powered assistant that's here to help. Stretto Conductor was able to create this summary of a 20 page court filing in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.