American LaFrance hearing to reconsider DIP access continued to Feb. 25

By Jennifer Lanning Drey

Portland, Ore., Feb. 21 - The hearing to reconsider the order granting American LaFrance, LLC interim access to $10 million of its debtor-in-possession financing was continued to Feb. 25 to allow the company and its official committee of unsecured creditors time to resolve their issues, according to an attorney.

The hearing was originally scheduled for Thursday at the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, on Feb. 12 the creditors committee asked the court to reconsider the company's access to the financing so that the committee could fully investigate the proposed DIP financing.

American LaFrance has requested approval to obtain $50 million of DIP financing with Patriarch Partners LLC as the administrative agent.

In its motion requesting the reconsideration, the creditors committee said Patriarch's "pervasive control" over the company raises concerns about the good faith financing findings made by the court under the interim DIP order.

Specifically, the committee said Patriarch-managed funds hold all or most of the company's equity, and they are also American LaFrance's pre-bankruptcy lenders.

In addition, the committee said Patriarch Partners Management Group, LLC provides the company with chief executive officer services.

American LaFrance, a Summerville, S.C., manufacturer of emergency and other heavy-duty vehicles, filed for bankruptcy on Jan. 28. Its Chapter 11 case number is 08-10178.

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