VarTec unsecured creditors committee objects to exclusivity request

By Caroline Salls

Pittsburgh, July 20 - VarTec Telecom, Inc.'s official committee of unsecured creditors objected to the company's request for an extension to its exclusive periods to file a plan of reorganization and solicit votes on the plan, according to a Wednesday filing with the U.S. Bankruptcy Court for the Northern District of Texas.

The company wants to extend its exclusive period to file a plan to Oct. 3 from Aug. 1 and to solicit votes to Dec. 1 from Oct. 3.

The committee said, this being the committee's third motion for an exclusivity extension, the criteria of "good cause has faded."

The committee said all three requests have been "virtually identical" in the company's analysis of the nine factor test of whether the extension is warranted, and provide little basis for granting the extensions.

Also, the committee said the company does not provide any realistic prospect or timetable for preparing and filing a plan and related disclosure statement within the extended exclusive period.

"Most importantly, the [company] cannot provide any commitment from the Rural Telephone Finance Cooperative, the purported secured creditor in the cases, to support or fund the implementation of a Chapter 11 plan," the committee said in the objection.

In its motion for the extension, the company said it has been busy negotiating claims settlements, litigating setoffs with carriers and marketing and identifying a stalking horse bidder for the sale of its assets.

A hearing on the extension is scheduled for Friday.

VarTec, a Dallas-based telecommunications provider, filed for bankruptcy on Nov. 1, 2004. Its Chapter 11 case number is 04-81694.

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