Werner unsecured creditors committee objects to asset sale, cites lack of plan protections

By Caroline Salls

Pittsburgh, April 18 - Werner Holding Co. (DE), Inc.'s official committee of unsecured creditors objected to the proposed sale of substantially all of the company's assets, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

According to the objection, the committee is not opposed to selling the assets, but the proposed sale disposes of substantially all of Werner's assets without the protections of a plan of reorganization.

"The current structure allows the debtors' secured creditors to use the bankruptcy court as a foreclosure court," the committee said in the objection.

The committee said the sale should provide a bridge to a plan of reorganization or liquidation that gives value to unsecured creditors.

In addition to the objection, the committee said it understands that there is a possibility that the two bids received for the assets may be combined into one bid.

One bid has been received from stalking horse bidders Black Diamond Capital Management and Brencourt Advisors LLC, and the other from the company's second-lien debtholders.

The committee said it believes that the sale should only be approved if the successful bid provides enough cash to pay all administrative and priority claims as part of a liquidating plan, provides sufficient funding for wind-down expenses and provides a prospect of recovery for unsecured creditors from litigation claims and other remaining assets.

The committee said bidders should also provide an investment opportunity in the purchaser for interested unsecured creditors.

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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