Leiner creditors committee objects to asset sale bid procedures being approved prior to plan filing

By Jennifer Lanning Drey

Portland, Ore., June 6 - Leiner Health Products, Inc.'s official committee of unsecured creditors objected to the company's motion for approval of the bidding procedures in connection with the sale of substantially all of its assets, according to a filing made Friday with the U.S. Bankruptcy Court for the District of Delaware.

According to the filing, the committee believes the sale process should only be approved in the context of a plan of reorganization or plan of liquidation to ensure that it reflects negotiations with creditors.

"The court and creditors must know with reasonable certainty that value is provided to the unsecured creditor class before the sale is approved, not after," the creditors said in the filing.

Specifically, the committee argued that Leiner's bank group should not be allowed to liquidate its collateral without a commitment to fund a confirmable Chapter 11 plan.

As previously reported, Leiner has entered into an asset purchase agreement with NBTY, Inc. to sell substantially all of its assets for $230 million.

A hearing on the creditors committee's objection is scheduled for June 11.

Leiner is a Carson, Calif.-based manufacturer of store-brand vitamins, minerals and nutritional supplements. The company filed for bankruptcy on March 10. Its Chapter 11 case number is 08-10446.

© 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.