Lenox disclosure statement approval postponed amid financing snag

By Rebecca Melvin

New York, Jan. 22 - Approval of Lenox Group Inc.'s disclosure statement was postponed on Thursday because financing hadn't yet been secured by Lenox term loan lenders that are attempting to bid for substantially all Lenox assets.

Judge Allan Gropper of the U.S. Bankruptcy Court for the Southern District of New York said all parties had agreed following a chambers conference that the disclosure statement needs further information with regard to distribution to classes that are voting on the plan, outlined by the statement.

A hearing on disclosure statement approval was reset for Jan. 26, with the understanding that it may be further adjourned.

Prior to the chambers conference, Gropper said, "The disclosure statement has one hole that wipes out all the rest out. We don't know if the term loan lenders are going to bid because we don't know if they have financing."

Feb. 9 is the deadline for such financing, and that timetable was not changed.

Counsel for the term loan agent and term loan lenders said the lenders had a proposal letter from two financial companies and that due diligence was ongoing.

Absent this agreement there won't be a vehicle to clear the $100 million of secured debt, the term loan lenders' counsel said.

Lenox, a maker of tableware, collectibles and giftware, filed for Chapter 11 bankruptcy protection in November with agreement in hand to sell substantially all of its assets to existing term loan lenders.

Under the agreement, the term lenders will form a new entity to purchase substantially all the assets in exchange for cancellation for some of their secured loans, subject to higher or better offers.

The debtor-in-possession lenders agreed to request to extend the current deadline of Jan. 23 for a disclosure statement approval order.

In addition, all objections to the disclosure statement have been resolved, including one by insurer Century Indemnity Co.

During the hearing, judge Gropper approved Lenox's request to enter into a premium finance agreement with workers compensation insurance vendors, which will provide 12 months of insurance for $2.5 million, that will be financed.

The former insurance providers refused to accept letters of credit to provide the coverage, Lenox counsel Alfredo Perez of Weil Gotshal & Manges said.

Eden Prairie, Minn.-based Lenox filed for bankruptcy on Nov. 23. Its Chapter 11 case number is 08-14679.

© 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.