Eurofresh creditors want asset sale to pay expenses, unsecured claims

By Caroline Salls

Pittsburgh, March 26 - Eurofresh, Inc.'s official committee of unsecured creditors objected to the proposed sale of substantially all of the company's assets, according to a March 25 filing with the U.S. Bankruptcy Court for the District of Arizona.

The committee said it does not oppose a sale of the company's assets, but that no sale should be approved, "unless all administrative expenses of the estate are paid in full and in cash at closing and there is some distribution to creditors holding general unsecured claims."

"Chapter 11 is not a federal foreclosure scheme granting enhanced rights to secured lenders, and courts have long held that it is inappropriate to run a Chapter 11 process for the benefit of the secured lender alone," the committee said in its objection.

In addition, the creditor group said it is not fair to allow the third-party purchaser of the assets to receive the benefits of the bankruptcy process without ensuring that the costs of that process, specifically administrative expenses, are paid in full in cash.

According to the objection, proposed buyer Zona Acquisition Co. LLC only acquired Eurofresh's secured debt "to contrive a credit bid for substantially all the debtor's assets."

The committee also said any potential buyer should purchase the assets outside of the court's jurisdiction without the benefits of the Chapter 11 process if it is unwilling to provide a distribution to creditors.

Eurofresh, a Willcox, Ariz., greenhouse tomato and cucumber producer, filed for bankruptcy on Jan. 27. Its Chapter 11 case number is 13-01125.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.