American Remanufacturers' examination request draws objection from Jefferies

By Caroline Salls

Pittsburgh, Feb. 16 - American Remanufacturers, Inc.'s senior lenders' request for an examination in the company's Chapter 11 case to investigate a restatement of its financial statements drew objection from Jefferies & Co., Inc., according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

According to the objection, the motion seeks discovery from Jefferies, a non-debtor third party in American Remanufacturers' case, concerning potential private claims of the lenders "that are irrelevant to the administration of the estate" in the company's case.

As a result, Jefferies said the discovery request violates bankruptcy code and should be denied.

According to the examination motion, less than one month after the closing of the company's credit facilities, PricewaterhouseCoopers, LLP resigned as American Remanufacturers' auditor, and the company's financial statements were restated.

"The restatement could not have been more material - revealing [the company] to be deeply insolvent entities with negative EBITDA," the motion said.

The lenders said the information that had been originally given to them portrayed the company as solvent entities with positive EBITDA.

A hearing on approval of the examination request is scheduled for Feb. 21.

American Remanufacturers, an Anaheim, Calif.-based producer of remanufactured automobile parts, filed for Chapter 11 on Nov. 8, and it ceased all operations when its case was converted to a Chapter 7 liquidation on Nov. 18. The company's case number is 05-20022.

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