High Voltage's appeal rejected, Chapter 11 trustee named

By Ellen Chang

Houston, Feb. 22 - High Voltage Engineering Corp.'s emergency request for a reconsideration of the U.S. Bankruptcy Court for the District of Massachusetts' denial of its proposed debtor-in-possession financing and decision to appoint a trustee to oversee the bankruptcy proceedings was denied Friday.

The court named Stephen Gray as the Chapter 11 trustee.

"As set forth in this court's order of Feb. 17, 2005, the debtors' business judgment is compromised by the liquidity crisis on the heels of their confirmed plan in their prior case as well as decision making by senior management which has been engaged for little more than six weeks," the court said in its filing.

"With objections to the employment of debtors' counsel pending, this court concludes that the benefits of a chapter 11 trustee outweigh the harm described in general terms by the debtors. Accordingly, the alternative motion for stay pending appeal is denied."

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 motion, the court said previously.

The company did not submit "reliable and credible information" regarding its assets

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 met certain conditions.

High Voltage filed for Chapter 11 of Feb. 8. 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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