Stant lender calls for trustee appointment, asset sale investigation

By Caroline Salls

Pittsburgh, Sept. 4 - Stant Corp. second-lien lender Northstar Mezzanine Partners V LP asked the U.S. Bankruptcy Court for the District of Delaware to appoint a trustee to administer Stant's bankruptcy case, according to a Friday court filing.

As an alternative to the trustee appointment, Northstar asked the court to order appointment of an examiner to investigate the company's pending asset sale.

According to the motion, Stant is majority owned and controlled by H.I.G. Capital, LLC.

"Not only does H.I.G. own a majority of the debtors' common stock, it controls the board, has performed management oversights duties for a fee, and has even placed its own personnel in key management positions," the lender said in the motion.

"In preparing to file these cases, however, H.I.G. chose to take on two additional roles that are fundamentally at odds with its fiduciary responsibilities to Northstar and other constituents - those of would-be buyer and DIP financier."

Northstar said H.I.G. has "hatched a plan" to transfer all of Stant's assets to a newly formed, H.I.G.-controlled entity, "while at the same time stripping off millions in debt and discouraging other suitors from participating in the sale process."

The lender has asked the court to schedule a hearing for Sept. 15.

Stant, a Connersville, Ind.-based automotive fuel system and gas cap manufacturer, filed for bankruptcy on July 27. Its Chapter 11 case number is 09-12647.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.