Greensill Capital sale timeline for Finacity interests extended

By Sarah Lizee

Olympia, Wash., May 14 – Greensill Capital Inc.’s timeline for the sale of its 100% ownership interests in Finacity Corp. has been extended, according to an order filed Friday with the U.S. Bankruptcy Court for the Southern District of New York.

Specifically, the auction will now be held on June 9, and the sale hearing will be held on June 15.

As previously reported, the company entered into a stalking horse agreement with the founder and current chief executive officer of Finacity.

Greensill said in its motion that as an insider of the asset but not the seller, the CEO is in a particular position to properly value the debtor’s interest in the Finacity equity and set the floor as a stalking horse bidder, but at the same time, has no conflicts in relation to the debtor or its officers that would raise suspicions about the legitimacy or impartiality of the sale process.

The stalking horse purchase agreement provides for total consideration of about $24 million, consisting of $3 million in cash and the release of all liabilities stemming from the earn-out payments, against the debtor and the guarantors, and of all other claims held by the stalking horse bidder against the debtor, which if allowed in their full amounts could aggregate to more than $21 million in general unsecured claims against the debtor’s estate.

The debtor’s potential liability on account of the earn-out payments is larger than the debtor’s estimated general unsecured claims pool – $21.13 million, which includes the maximum earn-out payment payable in June and amounts due if the Finacity CEO becomes entitled to the maximum earn-out payments for the next three years – versus about $5 million to $7 million in general unsecured claims, excluding intercompany claims.

“The transaction contemplated by the stalking horse purchase agreement is therefore also beneficial in that it serves to simplify and resolve potential unsecured claims against the debtor,” the company said in its motion.

The stalking horse agreement includes a 2% breakup fee and an up to $100,000 expense reimbursement.

New York-based Greensill Capital is the U.S. arm of Greensill Capital Management, a financial services company. The Chapter 11 case number is 21-10561.

© 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.