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World Health Alternatives unsecured creditors committee objects to DIP, asset sale procedures
By Caroline Salls
Pittsburgh, March 13 - World Health Alternatives, Inc.'s official committee of unsecured creditors objected to the company's debtor-in-possession financing motion and to the bidding procedures for the proposed asset sale, according to Friday filings with the U.S. Bankruptcy Court for the District of Delaware.
"The proposed DIP order and DIP credit agreement represent the work of a bully lender, which on one hand purports to be oversecured and on the other hand has demanded aggressive and absurd terms from the [company] under a very short financing facility that allows only enough time to force a quick sale down the throats of all other creditor constituencies," the committee said in the DIP objection.
The committee said the sale only provides sufficient funds to satisfy the DIP lender's claims and the "substantial" fees and interest it is charging.
The committee also said the DIP terms do not provide enough time and flexibility to allow the company and the committee to adequately investigate and pursue other restructuring and sale opportunities.
In its objection to the sale procedures, the committee said World Health's Chapter 11 cases were not filed to maximize value "or to even allow for the possibility that the [company's] businesses can be reorganized."
Instead, the committee said the company only intends to further the goal of lender CapitalSource Finance, LLC to quickly transfer World Health's assets to Jackson Health Staffing, a CapitalSource-financed buying group that includes key World Health management employee Paul Gunnoe.
In addition, the committee said the proposed purchase price provides for absolutely no recovery to unsecured creditors.
World Health filed for Chapter 11 on Feb. 20. Based in Pittsburgh, it provides staffing services for the medical industry. Its Chapter 11 case number is 06-10166.
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