The U.S. Bankruptcy Court approved Katy Industries’ motion for entry of orders (i) approving and authorizing bidding procedures in connection with the sale of substantially all assets, approving stalking horse protections, approving procedures related to assumption and assignment of certain executory contracts and unexpired leases and (ii) approving and authorizing sale of substantially all of the Debtors’ assets to the successful bidder free and clear of all liens, claims, encumbrances and other interests.
As previously reported, “The Debtors entered into an asset purchase agreement with Jansan Acquisition (the ‘Stalking Horse Purchaser’), a newly created entity co-owned by Highview Capital, a third-party investor and affiliate of Victory Park Management, as administrative agent for the Company’s pre-petition second lien lender….Pursuant to the terms of the Stalking Horse Agreement, the Stalking Horse Purchaser has agreed to purchase the Purchased Assets in exchange for (i) the assumption of the Encina Obligations; (ii) a credit bid of the amount outstanding under the proposed $7.5 million D.I.P. Credit Agreement (the ‘DIP Credit Agreement’), (iii) a credit bid of all outstanding amounts due and owing under the Second Lien Credit Agreement; and (iv) the assumption of certain additional liabilities (the ‘Stalking Horse Purchase Price’).”
The Debtors also filed with the Court a notice of sale procedures, auction date and sale hearing. The notice states, “Pursuant to the terms of the Bidding Procedures, the Bid Deadline is July 12, 2017. Pursuant to the terms of the Bidding Procedures, an auction to sell the Purchased Assets will be conducted on July 14, 2017. A hearing will be held to approve the Sale of the Purchased Assets to the Successful Bidder on July 17, 2017, with objections to the Sale due by July 5, 2017. On or before June 20, 2017, as stated on the record at the hearing on approval of the Motion, the Debtors intend to file with the Court an Amended and Restated Asset Purchase Agreement with the Stalking Horse Purchaser.”
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