Indalex creditors call for case conversion in light of Sun control

By Caroline Salls

Pittsburgh, Sept. 22 - Indalex Holdings Finance, Inc.'s official committee of unsecured creditors has asked the U.S. Bankruptcy Court for the District of Delaware to convert the company's Chapter 11 bankruptcy case to Chapter 7 or appoint a Chapter 11 trustee, according to a Monday court filing.

"The debtors, which are non-operating entities, and insider [stockholder Sun Capital Partners, Inc.] have postured these cases to eliminate any remaining chance of another creditor receiving a distribution from these Chapter 11 cases," the committee said in the motion.

The committee said potential value can be derived for other creditors, but only if the case is immediately converted.

In addition, the committee said it believes that various claims exist against Indalex's officers and directors, as well as state law claims against Sun-related entities and other insiders.

The committee said the investigatory period has not expired, and the Chapter 7 trustee would still be able to prosecute the claims against Sun if the case were converted.

The committee said Indalex's assets have been sold and the only remaining purpose of the Chapter 11 case is to wind down its affairs.

As a result, the committee said "no rehabilitation is contemplated and an insider litigation target should not be the only beneficiary of the Chapter 11 process."

A hearing is scheduled for Oct. 13.

Indalex, a Chicago-based aluminum extruder and producer of soft alloy extrusion products, filed for bankruptcy on March 20. Its Chapter 11 case number is 09-10982.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.