USA Synthetic hearing on $15 million asset sale pushed back to June 1

By Kali Hays

New York, May 26 – USA Synthetic Fuel Corp.’s hearing to approve a proposed $15 million asset sale to stalking horse bidder Third Eye Capital Corp. has been adjourned to June 1, according to a May 26 filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Third Eye agreed to purchase substantially all assets of USA Synthetic and Lima Energy, subject to receipt of higher bids in a court-supervised auction process.

USA Synthetic said the buyer, in its capacity as administrative agent under a note purchase agreement and unit purchase agreement, will surrender and release a portion of the company’s debtor-in-possession loan, a portion of the note obligations, a portion of the breakup fee and expense reimbursement to be paid if the stalking horse bidder is not the high bidder and credit the sellers in the amount of $15 million to satisfy payment of the purchase price at closing.

The proposed breakup fee is $450,000, and up to $1 million of Third Eye’s expenses would be reimbursed if it is not the high bidder.

Under the bid procedures, any competing bids were due by 5 p.m. ET on the date that is 55 days after USA Synthetic’s bankruptcy filing.

The minimum overbid amount was set at $500,000. However, the company retained the right to decrease that amount, provided that it was no lower than $100,000.

Cincinnati-based USA Synthetic is a provider of clean energy systems. The company filed for bankruptcy on March 17 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 15-10599.

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