BNY Asset Solutions wants Galey & Lord hearing on sale procedures delayed

By Jeff Pines

Washington, Sept. 7 - Galey & Lord's term loan agent, BNY Asset Solutions LLC, wants the hearing on bidding and sale procedures for the company delayed.

BNY Asset Solutions filed a motion with the U.S. Bankruptcy Court for the Northern District of Georgia Monday.

Galey & Lord filed for Chapter 11 on Aug. 19 with a deal to sell its assets to Patriarch Partners LLC, subject to a bankruptcy court-approved auction.

BNY said Patriarch owns a seat on the board, is the largest term lender and is a $10 million lender under the company's $80 million debtor-in-possession financing facility. A final hearing on the DIP is scheduled for Sept. 13.

Speaking for the term lenders, BNY said they believe the proposed bidding procedures would limit competition for the company's assets and discourage "an open and fair process." It held a conference call with Patriarch and Galey & Lord on Aug. 30.

Galey & Lord's financial adviser, Houlihan Lokey Howard Zukin, told BNY that Patriarch "was not receptive to most if not all of the term lenders' concerns."

Since Aug. 31, BNY has been trying to schedule an oral deposition of Lynn Tilton of Patriarch without any success and seeking to obtain certain documents. It believes the documents and interview of Tilton are essential for a fair bidding process.

BNY said Patriarch has refused to make Tilton available until after the scheduled hearing on Sept. 13. Galey & Lord's Chapter 11 case number is 04-43098.

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