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DirectBuy Holdings Objection Filed

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The U.S. Trustee assigned to the DirectBuy Holdings case filed with the U.S. Bankruptcy Court an objection to THE Debtors’ motion for an order authorizing the sale of all or substantially all of the Debtors’ business assets free and clear of liens, claims and interests and approving the assumption and assignment of certain executory contracts and unexpired leases related thereto.

The Trustee asserts, “The Motion seeks approval of the sale of substantially all of the Debtors’ assets to the stalking horse bidder, which is a special purpose entity established by the holders of the Debtors’ prepetition secured notes, who are also the holders of 100 % of the equity in the Debtor DirectBuy Holdings (the ‘Lenders/Owners’). The Lenders/Owners have made a credit bid of $ 10 million of the over $144 million that they assert they are owed as of the petition date. The proposed sale does not appear to provide any funds for distribution to unsecured creditors of the U.S. Debtors.”

In addition, “The U.S. Trustee objects to the Motion based on a lack of timely disclosure and transparency related to bonus payments and other compensation for insiders, including those that may give rise to avoidance actions.”

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