High Voltage denied DIP financing, court appoints trustee

By Ellen Chang

Houston, Feb. 17 - High Voltage Engineering Corp.'s request for debtor-in-possession financing was rejected by the U.S. Bankruptcy Court for the District of Massachusetts Thursday.

And the court appointed a U.S. Trustee to oversee the company's bankruptcy proceedings.

The company was denied the financing because they "have not presented, and, indeed, do not have, reliable and up-to-date financial information" for the court to assess the proposal, the filing said.

The company did not submit "reliable and credible information" regarding its assets and liabilities and has provided insufficient information about their income, expenses and cash flow, the court stated.

The company submitted unaudited quarterly reports for the period ending Oct. 30, 2004 and does not have financial statements for the third quarter for the fiscal year ending on Jan. 31, the court stated.

The monthly internal reports ending with the month of November 2004 submitted only contained limited unaudited financial information, the court added.

The company has also failed to explain why Evercore Restructuring LLP, its former financial advisor, and Jefferies & Co., Inc., the financial advisor to the official committee of unsecured creditors, did not "sound the alarm as to the debtors insufficient cash flow" after the effective date of the company's third amended plan of reorganization in High Voltage's prior Chapter 11 case.

High Voltage had a commitment for $16.2 million of debtor-in-possession financing from GE Commercial Finance. It was asking for interim approval for $5 million, of which $2.5 million would have been available immediately and $2.5 million once it meets certain conditions.

High Voltage filed Feb.8 for Chapter 11 in the U.S. Bankruptcy Court for the District of Massachusetts. Its case number is 05-10787.

The New Kensington, Pa., maker of industrial power control and surface analysis products previously emerged from Chapter 11 on Aug. 10, 2004 under a restructuring that converted its 10½% senior notes to equity in the reorganized company.

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