Oglebay Norton objects to converting case to Chapter 7, appointment of trustee

By Jeff Pines

Washington, Nov. 2 - Oglebay Norton called a motion by Nufleet LLC to convert Olgebay Norton's bankruptcy case to Chapter 7 and appointing a trustee the "latest desperate attempt at forcing a sale," according to a filing Monday with the U.S. Bankruptcy Court for the District of Delaware.

Nufleet, which is offering to acquire Oglebay Norton for $496.6 million and the assumption of $50 million of benefit liabilities, believes a trustee is needed because Oglebay Norton's reorganization plan has not dealt fairly with the asbestos and silica tort claims, has not proposed a confirmable plan, has ignored Nufleet's offer to buy the company and has "frustrated every attempt of the Nufleet consortium to acquire reasonable due diligence regarding its purchase offer."

But the company denies the allegation and said that even though it is not interested in selling its assets, it has cooperated with Nufleet and its consortium, considered its offers, and provided help with due diligence.

The problem is Nufleet wants to buy Oglebay Norton on the cheap, Oglebay Norton said.

"Nufleet has decided to toss any argument it can conjure at the wall and hope that something sticks...What is not to be found within the motion is any discussion whatsoever of the legal standards for conversion, much less any evidence demonstrating that those standards have been satisfied," the company said.

For example, Nufleet failed to show that Oglebay Norton cannot be restructured successfully and continue doing business. Monthly operating reports show a positive cash flow and no diminishing value in assets, the company said.

Nufleet estimates a liquidation would give creditors at least 41.9 cents on the dollar compared with the company's plan of 27.7 cents on the dollar.

A hearing on converting the case to a Chapter 7 liquidation and on appointing a trustee is scheduled for Nov. 15.

On Nov. 16, there will be a limited reopening of the confirmation hearing.

Oglebay Norton filed for bankruptcy on Feb. 23, 2004. Its Chapter 11 case number is 04-10558.

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