Metalforming unsecured creditors committee objects to asset sale-based exclusivity extension request

By Caroline Salls

Pittsburgh, Nov. 1 - Metalforming Technologies, Inc.'s official committee of unsecured creditors objected to the company's request for a four-month extension to its exclusive periods to file a plan of reorganization and solicit votes on the plan, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

"Having spent the first four months of these cases focused solely on a sale designed to appease their largest unsecured creditor and majority shareholder, [Metalforming] now requests that this court grant them a four-month extension of their exclusive periods to file and solicit acceptances of a Chapter 11 plan," according to the objection.

"Such an extension would leave [Metalforming's] unsecured creditors hostages of a Chapter 11 process that, left unchecked, is being used to flush unsecured debt with no consideration or review of viable alternatives that would likely provide a meaningful distribution to unsecured creditors."

According to the committee, if the company is successful in consummating the sale, proceeds will be insufficient to satisfy its secured debt, leaving no assets to formulate, negotiate, solicit acceptances or fund a Chapter 11 plan.

A hearing is scheduled for Nov. 7.

Metalforming, a Chicago-based automobile parts manufacturer, filed for bankruptcy June 16. Its Chapter 11 case number is 05-11697.

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