Werner investor group increases offer for company assets to $262 million

By Caroline Salls

Pittsburgh, Feb. 6 - Werner Holding Co. (DE), Inc.'s second-lien committee said the investor group that previously offered to purchase substantially all of the company's assets for $175 million has submitted a new offer valued at $262 million, $6 million more than the Black Diamond Commercial Finance LLC offer, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The committee said the new offer:

• Pays in full in cash the company's debtor-in-possession facility and first-lien credit facility;

• Provides funds to pay professionals fees during the wind-down of the company's estates after closing of the sale, currently estimated at $1.25 million;

• Provides for assumption by the buyers of post-bankruptcy vendor obligations, pre-bankruptcy critical vendor amounts, obligations arising under customer programs, business liabilities to employees and products liability claims of ongoing customers as of the sale closing; and

• Assumption of roughly $15 million in additional liabilities.

The committee said there are two major differences between the increased investors' offer and Black Diamond's offer.

First, the committee said the Black Diamond proposal offers lenders under the company's first-lien credit facility only equity securities in the new company to be formed to acquire the assets, while the investors' offer pays the claims of the first-lien lenders in cash in full.

"As a result of the investor group's new offer to pay the first-lien credit facility obligations in full in cash at closing, the Black Diamond proposal to credit bid the first-lien credit facility debt is now dead on arrival," the committee said in the filing.

Second, the committee said the Black Diamond offer leaves the company's unsecured creditors committee with claims against the first-lien agents and lenders, but with no funds to prosecute the claims.

In contrast, the committee said the investors' offer includes a proposed settlement with the unsecured creditors committee, under which unsecured creditors will be entitled to purchase up to $25 million of the equity in the entity that will buy the assets and a litigation reserve and wind-down amount would be funded by the investor group in exchange for allowance of claims under the first- and second-lien credit facilities.

The committee also objected to the company's request for a second forbearance agreement that the committee says contains provisions that "skew the playing field" in the sale and auction process in favor of Black Diamond.

Werner, a Greenville, Pa., manufacturer and distributor of ladders, climbing equipment and ladder accessories, filed for bankruptcy on June 12, 2006. Its Chapter 11 case number is 06-10578.

© 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.