Arts District Patients Collective, Inc.

I. Background

The Debtor filed a voluntary Chapter 11 petition on February 2, 2023 (the “Petition Date”) and elected treatment under Subchapter V. The Debtor filed a Chapter 11 Plan of Liquidation [Doc. No. 46] (the “Plan”) on May 24, 2023. The Court conducted a Subchapter V Status Conference on June 14, 2023. The purpose of the Status Conference was to determine whether it would be feasible for the Debtor to seek confirmation of the Plan prior to the resolution of disputes with Swamp Capital, LLC (“Swamp Capital”). The Debtor disputes Swamp Capital’s claim of a 50% interest in the Debtor, and contends that 100% of the Debtor’s shares are held by James Shaw. The Debtor also disputes the validity of Claim No. 6, a secured claim in the amount of approximately $4.4 million asserted by Swamp Capital. The Debtor holds an interest in applications for licenses with the City of Los Angeles Department of Cannabis Regulation (the “License Applications”). At the Status Conference, the Debtor represented that it was attempting to settle its disputes with Swamp Capital. The contemplated settlement would involve the sale of the License Applications to Swamp Capital. At the Status Conference,…