IdleAire objects to trustee motion calling for appointment of examiner

By Jennifer Lanning Drey

Portland, Ore., June 9 - IdleAire Technologies Corp. objected to its U.S. Trustee's motion asking the U.S. Bankruptcy Court for the District of Delaware to appoint an examiner to investigate the company's proposed debtor-in-possession financing, asset sale procedures and asset value, according to a Friday court filing.

The company claims the trustee's motion "relies on either outdated or inaccurate assertions as to business terms, ignores the financial realities that all parties are faced with in this case, seeks relief that will benefit no creditor constituency and saddles the estate with an administrative expenses for which no provision for payment has been or can be made absent an accommodation by the DIP facility lenders."

IdleAire argued that appointment of an examiner would not be in the best interest of its creditors because it would add another layer of unfunded administrative expenses liability to the estate.

The company also noted that its creditors committee is already active in reviewing the circumstances of the company's bankruptcy case.

IdleAire further claimed that many of the issues raised by the trustee regarding the DIP financing have either been suspended through later events, should not be viewed as problematic given the nature of the case, or are inaccurately stated.

As previously reported, U.S. trustee Roberta A. DeAngelis asked the court to appoint an examiner to investigate the details of the DIP loan and whether the proposed asset sale is in the best interests of creditors because the proposed purchase price is less than 10% of the book value of the company's assets disclosed in its most recent financial statements for the fiscal year ended Dec. 31.

DeAngelis said previously that no going-concern valuation has been obtained for IdleAire's assets; the company made "no active conscious effort" to sell its assets as a going concern before it negotiated various loan transactions and the proposed sale with its majority secured bondholders.

In addition, the trustee said the investors want to credit bid all or a portion of their bond debt, although they have not proven that they have any legal right to do so.

A hearing is scheduled for June 9.

Based in Knoxville, Tenn., IdleAire is a privately held research and development company that provides products and services for the long-haul trucking freight industry. The company filed for bankruptcy on May 12. Its Chapter 11 case number is 08-10960.

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