Sirva foreign non-debtor subsidiary share sale approved

By Caroline Salls

Pittsburgh, March 24 - Sirva Inc. obtained court approval to sell its ownership shares in some of its foreign non-debtor subsidiaries in order to keep Sirva UK Ltd. from being forced to begin U.K. insolvency proceedings, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

According to the motion, Sirva UK, a parent of the company's U.K. moving services businesses and Sirva's principal operating company, is experiencing a severe liquidity crunch.

If Sirva UK was forced to launch insolvency proceedings, Sirva said it would likely lose its ownership of the Pickfords trademark, which would hurt many of the debtors' other international businesses that rely on the Pickfords brand as a foundation of their operations.

As a result, Sirva debtor North American International Holding Corp. has agreed to a private negotiated sale of shares of the debtors' U.K. moving services businesses to companies managed by TEAM Relocations Ltd.

TEAM has agreed to buy the debtors' shares in its U.K. and Irish businesses for £2.11 million.

Specifically, the TEAM entities will pay £1.05 million for 100 ordinary shares of Sirva Group Holdings Ltd., £1.05 million for 14 million ordinary shares of Sirva Ireland Ltd. and £1 for one ordinary share of Sirva Ireland.

Also under the terms of the proposed sale, the buyers will provide Sirva UK with £5 million of immediately available funding, which will allow the company to avoid U.K. insolvency proceedings.

The proceeds from the share sale will be used to pay an intercompany loan owed to Sirva Group Holdings Ltd. by Sirva Holdings Ltd.

In addition, the buyers have agreed to take over a £1.6 million obligation to Sirva UK's pension scheme, and the buyers have agreed to not object to the extinguishment of either the debtors' pension scheme guarantees or an £8.4 million intercompany debt from the debtors to Sirva UK.

The Sirva debtors will also retain the right to use the Pickfords trademark under the transaction.

Sirva, a Westmont, Ill.-based relocation services provider, filed for bankruptcy on Feb. 5. Its Chapter 11 case number is 08-10375.

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