Merit Group gets OK to sell assets for $46 million; will file new plan

By Lisa Kerner

Charlotte, N.C., July 26 - Merit Group, Inc. was granted approval to sell its assets to stalking horse bidder MG Distribution LLC for liquidation, according to a filing with the U.S. Bankruptcy Court for the District of South Carolina.

MG Distribution was the winning bidder - and only bidder - for the assets with a bid of $46 million. The purchase price was plus assumed liabilities subject to a working capital adjustment, according to an attorney familiar with the case.

As previously reported, Merit's official committee of unsecured creditors objected to the proposed sale of substantially all of the company's assets, arguing that "the sale does not appear to provide any real or meaningful benefit to the unsecured creditors in these cases."

Merit filed its plan of liquidation and related disclosure statement on July 18.

Under the plan, a liquidating supervisor will be appointed to administer the assets remaining after the sale of substantially all of Merit's assets is complete, as well as to make plan distributions and wind up the company's estates and Chapter 11 case.

Merit and the creditors committee now intend to jointly file an amended plan and disclosure statement.

Consequently the court will not schedule a hearing to approve the July 18 disclosure statement, the filing said.

Merit, a Spartanburg, S.C., paint sundry distributor, filed for bankruptcy on May 17. The Chapter 11 case number is 11-03216.

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