Global Motorsport creditors committee claims asset sale only benefits secured lender

By Caroline Salls

Pittsburgh, Feb. 13 - Global Motorsport Group, Inc.'s official committee of unsecured creditors objected to the bid procedures for the company's proposed sale of substantially all of its assets, arguing that the proposed sale procedures only benefit the pre-bankruptcy secured lender and could strip unsecured creditors of any chance of recoveries in Global's Chapter 11 case.

"By approving the bid procedures motion at this time, the court would be facilitating a de facto liquidation of the estates and risking any chance of recoveries for unsecured creditors," the committee said in the objection.

In addition, the committee said the proposed $16 million stalking horse bid from Dae-Il USA, Inc. appears to be much lower than the value of the assets being sold, and it "pales in comparison" to Global Motorsport's alleged $138 million of pre-bankruptcy secured debt.

As a result, the committee said the sale does not benefit any creditor but the company's pre-bankruptcy secured lender, who is also the controlling shareholder and supplier of Global's senior management.

Global Motorsport, a Morgan Hill, Calif.-based wholesale distributor of aftermarket motorcycle parts and accessories, filed for bankruptcy on Jan. 31. Its Chapter 11 case number is 08-10192.

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