DirectBuy Holdings Objections Filed


The U.S. Trustee assigned to the DirectBuy Holdings’ case and the official committee of unsecured creditors filed with the U.S. Bankruptcy Court separate objections to the Debtors’ motion (a) for an order approving the stalking horse asset purchase agreement and procedures in connection with the sale of all or substantially all of the Debtors’ business assets and (b) authorizing the sale of all or substantially all of the Debtors’ business assets free and clear of liens, claims and interests.

The Trustee asserts, “The U.S. Trustee objects to those portions of the Motion that seek to pay the Lenders/Owners, if outbid at auction, an expense reimbursement of $ 500,000. Expense reimbursements, along with break-up fees are intended to be incentives for a party to invest time and money to do the due diligence necessary to make a stalking horse bid, knowing it might be outbid at the auction and therefore out-of-pocket for its expenses.”

The objection continues, “Finally, the U.S. Trustee objects to the provision in the Asset Purchase Agreement (‘APA’) that gives this Court concurrent jurisdiction with the Canadian Court presiding over the bankruptcy cases of the Canadian subsidiaries of the U.S. Debtor UCC of Canada, Inc. (the ‘Canadian Subsidiaries’), with respect to any disputes or claims arising in connection with the APA. The Committee, the Debtors’ creditors, the U.S. Trustee and other parties in interest in these cases should not be forced to attend hearings in Canada. The sale is being approved by this Court, not the Canadian Court, and the U.S. Court should have exclusive jurisdiction over any disputes relating to the same.”

Read more bankruptcy news.