Aerosoles DIP lender’s claim valuation summary judgment motion denied

By Caroline Salls

Pittsburgh, June 25 – AGI Holdco, Inc., which does business as Aerosoles, debtor-in-possession lender Polk 33 Lending, LLC’s motion for a summary judgment regarding the value of secured claims for purposes of the allocation of sale proceeds and a distribution was denied Monday by the U.S. Bankruptcy Court for the Southern District of New York.

Polk 33 said in its summary judgment request that there is no dispute that THL Corporate Finance, Inc. credit bid its claim at auction in the amount of $12.21 million and that the credit bid established the secured amount of THL’s claim.

As a result, Polk 33 said THL’s secured claim in Aerosoles’ bankruptcy case should be limited to $12.21 million, allowing payment in full of Polk 33’s DIP loan claim.

“Once THL’s collateral value was established and capped by its credit bid of $12,209,519, Polk 33 was legally entitled to receive a distribution sufficient to discharge all outstanding DIP obligations, which currently amount to not less than $6,634,641,” the motion said.

However, Polk 33 said THL refuses to comply with the terms of a lender agreement and pay Polk 33 what was owed as of the closing of the sale.

In Monday’s opinion, judge Kevin J. Carey said he did not agree that the secured portion of THL’s claim is determined by its credit bid rather than the market price for the collateral.

Aerosoles is an Edison, N.J.-based global footwear company. The company filed bankruptcy on Sept. 15, 2017 under Chapter 11 case number 17-11962.

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