Metalforming Technologies $25 million asset sale approved

By Caroline Salls

Pittsburgh, Nov. 18 - Metalforming Technologies Inc. obtained court approval for its $25 million sale of substantially all of its assets to Zohar Tubular Acquisition, LLC, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

The sale also includes all the assets of Northern Tube Inc. and Crescive Die & Tool Inc. as well as all trademarks, tradenames and other intellectual property.

The sale drew several objections, which the court overruled in the sale order, including an objection from the company's official committee of unsecured creditors.

In its objection, the committee said there was no sound business reason for the proposed sale because the company is not facing a financial crisis and its assets are not declining in value.

Also, the committee said the bid price was not fair and reasonable because it was not negotiated and only reflects the forced liquidation value of the assets.

"It sets the floor too low, conveys the wrong message to the market and will not generate the best and highest price," the committee said in the objection.

In addition, the committee contended that the buyer was using its insider position as a lender to force a sale when the market is down, thereby breaching its fiduciary duty "by exploiting [Metalforming's] confidential forecasts of future value and attempting to usurp those future profits for its own benefit."

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

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