Lexington lender agents look to access details to allow asset sale

By Caroline Salls

Pittsburgh, Sept. 23 - Lexington Precision Corp.'s pre-bankruptcy secured lender agents requested court approval to set aside standstill agreements to allow Gordian Group to immediately begin serving as the exclusive agent for the sale of the company's business units and/or assets, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

According to the motion, the company has prohibited several dozen financial parties from discussing any potential transactions with anyone but Lexington.

Because of this, lender agents Capital Source Finance LLC and CSE Mortgage LLC said the company has "created a de facto extension of the debtors' exclusive periods by entering into non-ordinary course transactions without notice or a hearing."

As previously reported, the company's pre-bankruptcy secured lenders have filed a plan of reorganization and related disclosure statement for Lexington's bankruptcy case.

To support their plan confirmation efforts, the agents said they need cooperation from Lexington on claims, service lists, financial information and other information that is only available to the company or is protected by confidentiality provisions.

However, the lender agents said the standstill agreements that include the confidentiality provisions affect a significant portion of potential buyers with which the lenders want to explore sale transactions.

In addition, the agents said each of the standstill agreements is not enforceable against the potential buyers.

A hearing is scheduled for Oct. 6.

Lexington Precision, a New York-based manufacturer of rubber and metal components for the automobile and medical devices industries, filed for bankruptcy on April 2, 2008. Its Chapter 11 case number is 08-11153.

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