Real Industry Bankruptcy Objection Filed


Rentech’s ad hoc equity committee filed with the U.S. Bankruptcy Court an objection to Real Industry’s D.I.P. financing motion.

The ad hoc committee asserts, “The DIP Motion was filed shortly before the end of year with no advance notice that Real Industry was seeking financing or focusing in on a plan only weeks after the filing of the chapter 11 petition with its subsidiaries….The reality is that Real Industry’s need for cash is very limited. The company is not operating in any traditional sense of the word, nor is it currently seeking to acquire businesses….Finally, the proposed financing provided by Goldman Sachs & Co. is designed to dispose of, not preserve, nearly half the value of equity and its tax attributes on an expedited basis to Goldman, to the detriment of the existing shareholders.”

In addition, “Approval of this financing will lock in restrictive case milestones that effectively turn the plan process over to Goldman. The milestones set an extremely expedited time table including the filing of a plan by the end of January, well before the value of the equity and the tax attributes can be determined. There is no justification to arrange for the transfer of value in advance of the sale or reorganization of the operating entities. Based on the Debtor’s budget and its current resources, existing cash would be sufficient to sustain operations through the sale process.”

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