Otter Tail: court denies request for two-month exclusivity extension

By Lisa Kerner

Charlotte, N.C., April 23 - Otter Tail Ag Enterprises, LLC's request for an extension to its exclusivity period to seek acceptances of its Chapter 11 plan of reorganization was denied, according to a Friday filing with the U.S. Bankruptcy Court for the District of Minnesota.

As previously reported, Otter Tail wanted to extend its exclusive solicitation period to June 30 from April 28.

U.S. Bank NA as indenture trustee for the holders of the Otter Tail County, Minn., subordinate exempt facility revenue bonds, series 2007, and an ad hoc group holding a majority of the principal amount of the bonds filed an objection to Otter Tail's motion for the extension.

"The debtor cannot meet its burden of demonstrating 'cause' for the requested extension because the facts and circumstances of this case, including the 'new value' component in the existing plan proposed by the debtor, weigh heavily in favor of opening up the process to competing plans," according to the filing made by the objectors earlier in the month.

The debtor's authority for use of cash collateral expires in less than six weeks and the senior lenders are reluctant to permit use of cash collateral beyond the expiration, the motion objecting to Otter Tail's request said.

Otter Tail said it filed its proposed plan of reorganization and disclosure statement on Feb. 25.

The disclosure statement hearing is scheduled for May 12.

Otter Tail, a Fergus Falls, Minn., ethanol company, filed for bankruptcy on Oct. 30. Its Chapter 11 case number is 09-61250.

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