Radnor creditors committee seeks to change asset sale bid procedures

By Caroline Salls

Pittsburgh, Oct. 16 - Radnor Holdings Corp.'s official committee of unsecured creditors asked the U.S. Bankruptcy Court for the District of Delaware to modify the bidding procedures for the proposed sale of substantially all of the company's assets, according to a Friday court filing.

The proposed bid procedure modifications would include eliminating Tennenbaum Capital Partners LLC's Oct. 18 firm commitment date, setting Nov. 20 as the deadline for submission of stalking-horse bids, setting Nov. 21 as the deadline for selecting a stalking horse bid and extending remaining dates in the bid procedures by 30 days.

According to the motion, the committee has had substantial concerns from the beginning of the sale process that the "process is nothing more than a scheme to transfer [Radnor's] assets" to pre-bankruptcy lender and shareholder Tennenbaum Capital Partners.

The committee said that, following the negotiation of bid procedures with the committee, the company has "again engaged in actions that effectively freeze potential bidders out of the process and bar the committee from developing its own reorganization strategy."

In addition, the committee said Radnor's investment banker, Lazard LLC, has been unable to actually launch a sale process because of delays that have occurred since court approval of the existing bid procedures.

For example, the committee said a business plan was to have been presented by the company by Oct. 9, but the plan has not been presented.

"At this point, receiving the business plan simply does not provide the committee or Lazard enough time to develop a workable alternative," the committee said in the motion.

The committee said it believes an alternative does exist that would provide a higher value for the company's assets, and that Four M Investments has expressed an interest in buying the assets.

The committee said it believes Four M may submit a higher and better offer for the assets that would allow a distribution to unsecured creditors in Radnor's Chapter 11 case.

Radnor, a Radnor, Pa.-based foam cup, container and expandable polystyrene bead manufacturer, filed for bankruptcy on Aug. 21. Its Chapter 11 case number is 06-10894.

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