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Maurice Sporting Goods committee objects to bid procedures, financing
By Caroline Salls
Pittsburgh, Dec. 1 – Maurice Sporting Goods, Inc.’s official committee of unsecured creditors objected to the company’s bid procedures and debtor-in-possession financing motions, according to Thursday filings with the U.S. Bankruptcy Court for the District of Delaware.
“The debtors propose a sale process, on an extremely short timeline, for a transaction where most of the purchase price is based on speculative post-closing adjustments rendering it likely that the process only pays the debtors’ lenders, and potentially not even administrative expenses, while offering unwarranted bidding protections to the proposed stalking horse buyer,” the committee said in its sale procedures objection.
Specifically, the committee said Maurice agreed to “barely a three-week process from the entry of a sale procedures order to closing, and less than that for making or affording bidders to perform due diligence or bid.”
Despite this, the creditor group said the company also committed to the stalking horse bidder that it would not seek higher or better offers until after entry of the sale procedures order.
In addition, the committee said Maurice agreed to a high initial overbid of $1.5 million and unclear sale terms, “making competitive bidding virtually impossible.”
In the financing objection, the committee said timing milestones demanded by the lenders through the motion “chill any opportunity for competitive bidding and limit, if not eliminate, chances for unsecured creditor recovery in these cases.”
The creditor group also said the lenders’ right to credit bid afforded in the DIP financing motion in connection with the sale process should be limited to credit bidding on assets in which the lenders hold a valid, perfected and undisputed pre-bankruptcy lien.
Maurice is a Northbrook, Ill.-based distributor of outdoor sporting goods. The company filed bankruptcy on Nov. 20 under Chapter 11 case number 17-12481.
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