Metalforming private Lexington facility sale draws opposition

By Caroline Salls

Pittsburgh, Sept. 2 - Metalforming Technologies Inc.'s proposed $6.09 million private sale of its Lexington, Ky., facility drew several objections Thursday, according to filings with the U.S. Bankruptcy Court for the District of Delaware.

The official committee of unsecured creditors said the Lexington facility should be sold as part of the sale of all the company's assets and not "in a standalone private sale consummated on the virtual eve of the auction."

Kerry Steel, Inc., a member of the official committee of unsecured creditors, said it only found out that the company was seeking to sell the Lexington operations when the sale motion came out.

Although Kerry said it does not have enough information at this time to make a firm bid, based on what information it does have, it would be interested in acquiring the facility.

"Kerry Steel believes that it would be willing to pay $7 milion for the Lexington operations. That price would represent approximately a 7% increase over the price contemplated by the [purchase agreement]," according to Kerry's objection.

Star Manufacturing Inc. objected to the Lexington sale because it previously submitted a bid for the facility but was not approached to determine whether it was still interested while the joint venture purchase agreement was being negotiated.

"The facts leading up to the filing of the private sale motion suggest that either Oliver Isaac of Ken Stuben somehow required that [the company] deal with them exclusively as a condition to further negotiations, and [Metalforming] agreed to that condition and notified all other interested parties that they would not pursue further discussions with any other existing bidder," Star's objection said.

A hearing on the private sale of the Lexington facility is scheduled for Sept. 8.

Metalforming, a Chicago-based automobile parts manufacturer, filed for bankruptcy on June 16. Its Chapter 11 case number is 05-11697.

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