Performance Sports Group’s official committee of unsecured creditors filed with the U.S. Bankruptcy Court an objection to its motion for D.I.P. financing approval and the use of cash collateral.
The committee asserts, “The Committee is willing to consider a sale process as a means to that end. In the Committee’s view, the Debtors need liquidity support and postpetition financing. However, the proposed DIP Facilities, and in particular the Term DIP Facility, drive excessive value to the insider-controlled Stalking Horse Purchaser at the expense of the estates….The proposed DIP Facilities need to be restructured in a manner that preserves important sources of possible value for unsecured creditors….In these proceedings, all senior secured debt appears to be oversecured – without any recourse to the assets of the Innovation Debtors – and is to be fully satisfied by the Stalking Horse Bid. Yet holders of general unsecured claims are at risk of a less than full recovery.”
The committee also filed with the Court an objection to the Debtors’ proposed bidding procedures and stalking horse agreement. That objection asserts, “the Committee objects to the Court’s approval of the proposed Bidding Procedures and Stalking Horse Agreement because, taken together, they would foster a sale process that runs afoul of the Bankruptcy Code’s primary goal of maximizing value for a debtor’s estate and all of its creditors and instead seek to lock in the transaction for an insider Stalking Horse Purchaser.”
Read more bankruptcy news.