Lockwood International – Court Approves Sales of Rotterdam Assets; Edmonton Real Property; Sarnia Real Property; and US Operations and Singapore assets

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August 29, 2018 – The Court hearing the Lockwood International case approved four separate sales, including: (i) that of the Rotterdam assets to Southwest Stainless (the Rotterdam Buyer), (ii) that of the Edmonton real property and equipment to Tin Tara Properties (the Edmonton Buyer), (iii) that of the Sarnia real property to 175177 Canada Inc. (the Sarnia Buyer) and (iv) that of the US operations and singapore assets to Lockwood Holdco, LLC (the US/Singapore Buyer) [Docket No. 483]. 

The first sale notes order [Docket No. 662]  states, “The total consideration to be paid by [the Rotterdam] Buyer to Seller for the Purchased Assets is (a) $2,300,000 (the ‘Purchase Price’) and  (b)  the assumption by Buyer of the Assumed Liabilities….The cash deposit required by the Bid Procedures Order in the amount of $460,000 (the ‘Cash Deposit’) is to be held by Seller against payment of the Purchase Price and as security for the performance by Buyer of its obligations under this Agreement.” 

The second sale order [Docket No. 664]  states, “Purchase Price for the Assets (excluding GST) payable by [the Edmonton] Buyer to Seller shall be an amount equal to $6,500,000 (the ‘Original Purchase Price’) and shall be payable as follows: (a) Deposit of 1% of the Original Purchase Price (the “Deposit”), in Cash, to be deposited by Buyer pursuant to section 4.1 (a) within two Business Days following the execution of this Agreement….On August 10, 2018, the Debtors filed their Notice of Stalking Horse Bidder (Edmonton Property) [Docket No. 576] (the ‘Stalking Horse Notice’), naming Meniscus Group LLC (“Meniscus”) as the stalking horse bidder for the Assets.” 

The third sale order [Docket No. 665]  states, “Notwithstanding anything in the Agreement of Purchase and Sale to the contrary, the Purchase Price shall be $1,145,000, and the Deposit shall be $229,000….Kel-Gor Limited (‘Kel-Gor’) was the Backup Bidder for the Sarnia Property in the amount of $1,475,000 (the ‘Backup Bid’).” 

The fourth sale order [Docket No. 666]  states, “The total consideration to be paid by [the US/Singapore Buyer] Buyer to Seller for the Purchased Assets is (a) $20,200,000 (the ‘Purchase Price’) minus (b) the Inventory Shortfall Amount; minus (c) the Accounts Receivable Shortfall Amount; minus (d) the amount of any Transaction Taxes and Periodic Taxes that are allocated to Seller in accordance with Section 10.3(a) and Section 10.3(b), respectively, that have not been paid by Seller prior to Closing; plus (e) the assumption by Buyer of the Assumed Liabilities….Buyer shall pay to Seller the cash deposit required by the Bid Procedures Order in the amount of $4,040,000 (the ‘Cash Deposit’).” 

As previously reported [Docket No. 483], “The Debtors seek approval of a process designed to generate the greatest value for their constituents, whether through a going concern sale of the business to potential strategic or financial buyers, the sale of a portion of the Debtors’ assets to one or more buyers, or a restructuring of the business. Imperial, Keen, and the Debtors have been pursuing and will continue to pursue, a dual-track process to facilitate the above as a means to maximize both value and restructuring optionality.” 

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