Werner unsecured creditors committee objects to asset sale bid procedures amid credit bids

By Caroline Salls

Pittsburgh, March 1 - Werner Holding Co. (DE) Inc.'s official committee of unsecured creditors objected to the bidding procedures for the sale of substantially all company assets, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

According to the objection, two bids have been submitted for the assets, but both are credit bids made by secured lenders, which means no real cash would be paid to the estates under those proposals.

The committee said it supports the process of selling the business as a going concern, "but only if the sale provides a real and tangible benefit to the unsecured creditors in these cases and is not simply used by the secured creditors as a way to foreclose on the [company's] assets."

In addition, the committee said the automatic stay, which remains in effect throughout the entire Chapter 11 case, prevents unsecured creditors from exercising their rights "while the secured creditor takes control of the assets as a going concern."

As a result, the committee said the bid procedures must require minimum recoveries and protections for unsecured creditors as part of any sale or plan.

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.

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