Radnor committee requests stay pending appeal of judgment favoring Tennenbaum, sale extension

By Caroline Salls

Pittsburgh, Nov. 20 - Radnor Corp.'s official committee of unsecured creditors requested an emergency stay pending appeal of the U.S. Bankruptcy Court for the District of Delaware's judgment in favor of Tennenbaum Capital Partners, LLC in the committee's motion to prosecute causes of action against Tennenbaum, according to a Friday court filing.

The committee also again asked for an emergency extension of the bid deadline, auction and sale hearing related to the proposed sale of substantially all of Radnor's assets.

The committee said it also filed an emergency stay motion in the U.S. District Court for the District of Delaware to avoid delays in appellate review.

According to the motion, during the Nov. 16 hearing on the committee's original request to extend the bid deadline, auction and sale hearing in light of the alternative $250 million bid by Four M Investments LLC, the court said all of the committee's claims for relief against Tennenbaum had been denied.

As a result, the court continued the hearing on the Four M bid to allow the parties to assess the impact of the decision on the financing for the Four M bid.

The committee said it has expressed concern over Tennenbaum's ability to "credit bid" for the company's assets and its potential impact on the market place.

"The market place has now spoken," the committee said in the motion. "No other bids have been submitted and Tennenbaum is poised to purchase [Radnor's] assets without contest."

In addition, the committee said the auction began on Monday morning, and Tennenbaum was not present.

At the auction, Radnor said it now valued Tennenbaum's bid at $186 million to $190 million, but the company adjourned the auction until later on Monday because it did not yet have an agreement with Tennenbaum on the terms of the asset purchase agreement, the estates are administratively insolvent based on Tennenbaum's offer and the committee had requested an extension.

The committee said its request to postpone the resumed auction and the Nov. 21 sale hearing is appropriate because it will raise issued in its appeal that are pivotal to the court's decision to allow Tennenbaum's $128 million proof of claim and thereby to credit bid for the company's assets.

The committee also said the extension "would allow alternative bidders to enter the arena with a plan to turn around [Radnor's] business operations."

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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