Velti committee opposes sale procedures, asks court to adjourn hearing

By Caroline Salls

Pittsburgh, Nov. 19 - Velti Inc.'s official committee of unsecured creditors objected to the bid procedures for the proposed sale of substantially all of the company's assets, according to a Nov. 19 filing with the U.S. Bankruptcy Court for the District of Delaware.

"The commencement of these bankruptcy cases and the rollout of a highly aggressive sale process have been engineered to serve the interests of GSO Capital Partners, not the debtors' constituents," the objection said.

The committee said GSO, through its various affiliates, controls virtually all meaningful aspects of the Velti debtors' restructuring process, "and GSO is exercising this control to impose an extremely expedited and flawed process that essentially allows GSO to seize the debtors' assets before other stakeholders have time to evaluate this very complex transaction."

GSO control

According to the objection, some GSO entities purchased 100% of the pre-bankruptcy debt secured by assets of the Velti debtors and various non-debtor obligors at a deep discount just days before the company filed bankruptcy.

In addition, the committee said the company requested approval to allow GSO entities to provide debtor-in-possession financing, with the proposed financing to include a partial roll-up of the pre-bankruptcy credit facility debt.

The proceeds from the DIP financing would then be transferred to Velti's non-debtor parent.

Under the proposed bid procedures, the committee said the Velti debtors also seek approval to sell substantially all of their assets to another GSO affiliate, with the proposed sale consideration to be funded by the stalking horse bidder's credit bid of the rolled up debt under the pre-bankruptcy credit facility and the DIP financing.

"Considering that GSO alone dictates the timing and terms of all of the various events in the debtors' case, the highly expedited sale process proposed by the debtors in the bid procedures motion cannot be justified," the committee said.

"The only purported emergency that requires an accelerated sale process is GSO's desire to rush the process along in an effort to limit any competitive bidding and avoid meaningful oversight."

Unmet deadlines

The committee said even Velti is unable to meet the deadlines set in the proposed bid procedures, as it failed to serve notices on each party to an assumed executory contract by the Nov. 15 deadline.

The committee said the company also has not filed any schedules to the proposed asset purchase agreement, although the proposed bid procedures require any other potential bidder to submit an asset purchase agreement "together with all exhibits and schedules thereto."

"More time and further consideration is needed before the court enters any bidding procedures order," the committee said.

The creditor group asked the court to adjourn the Nov. 20 bid procedures hearing to the final DIP loan hearing.

Based in London, Velti provides mobile software platforms, applications and services for operators and advertising agencies in southeastern Europe, the United Kingdom and the United States. The U.S. operations filed for bankruptcy on Nov. 4 under Chapter 11 case number 13-12878.

© 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.