Radnor creditors committee asks court to postpone DIP, sale procedures hearings to allow investigation

By Caroline Salls

Pittsburgh, Sept. 12 - Radnor Holdings Corp.'s official committee of unsecured creditors asked the U.S. Bankruptcy Court for the District of Delaware to postpone the Sept. 18 hearing for approval of bidding procedures for the sale of substantially all of the company's assets and for approval of Radnor's debtor-in-possession financing to allow for a committee investigation, according to Tuesday court filings.

The committee wants the hearing on both motions to be extended to Oct. 18, and asked the court to enter an additional interim DIP order until the bidding procedures motion can be heard.

According to the motion, the committee asked for the hearings to be postponed to give it time to conduct an investigation into pre-bankruptcy and post-bankruptcy actions "that have culminated in the hurried attempt to sell substantially all of the debtors assets, on a pre-confirmation basis, with financing tailor made for such a transaction."

The committee said the investigation is necessary to evaluate the company's "truly extraordinary demands" and to fashion a solution that appropriately addresses the interests of all of Radnor's constituents, not just purported secured creditor and proposed buyer Tennenbaum Capital Partners LLC.

In addition, the committee said if the current bidding procedures motion is approved, Radnor's bankruptcy case "will be all but over as the proposed bid procedures will chill bidding and result in an insider sale that assigns avoidance action proceeds and grants releases to Tennenbaum."

"The result of such sale, and the inevitable result of approving the bid procedures, will be bankruptcy estates with no assets and no means for recovery for unsecured creditors," the committee said in its emergency motion.

Radnor, a Radnor, Pa.-based foam cup, container and expandable polystyrene bead manufacturer, filed for bankruptcy on Aug. 21. Its Chapter 11 case number is 06-10894.

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