January 16, 2020 – Further to the Court’s January 6th bidding procedures order [Docket No. 218], the Debtors filed (i) an asset purchase agreement in respect of a proposed $14.5mn sale of their Taylor Express, Inc. assets (the “Taylor Assets”) to White Willow Holdings LLC (the “Buyer”) and (ii) a notice of its intent to designate the Buyer as a stalking horse bidder [Docket Nos. 305 and 306, respectively]. The Court has established an auction/sale timetable which culminates in a January 22nd auction (if necessary), and a January 30th sale hearing. The asset purchase agreement is signed on behalf of the Buyer by Shawn Singh, the General Counsel at investment management firm Luminus Management LLC.
Also on January 16th, the Debtors requested Court authority for the private $3.2mn (CAN$4.25mn) sale of non-residential property in Winnipeg, Manitoba.
These developments continue an active period of asset sales for the Debtors who have also recently informed the Court of (i) an intended $9.2mn (CAN$12.0mn) private sale of non-residential real property located in Ontario, Canada [Docket No. 273]; (ii) an intended $9.2mn private sale of nonresidential real property located in York, Pennsylvania [Docket No. 266]; and (iii) an intended $2.5mn sale, by way of a section 363 auction/sale process, of an Indianapolis truck repair and maintenance facility (auction scheduled for January 22nd, Docket Nos. 247 and 248).
Taylor Assets Sale
Purchase Price. The Taylor Assets APA provides: “The aggregate consideration for the Acquired Assets (the ‘Purchase Price’) shall be equal to (i) $14.500,000 (the ‘Base Purchase Price’), plus (ii) Sellers’ Proration Amount, if any, and minus (iii) the Buyer Proration Amount, if any.
Bid Protections. The Debtors have requested bid protections in the form of (i) a break-up fee of $375k), (ii) an expense reimbursement of up to $187.5k and (iii) an initial overbid requirement of $100k. The debtors point pout that the break-up fee and expense reimbursement are "below the caps set forth in the Taylor Bidding Procedures Order."
Key Dates:
- Bid Deadline: January 20, 2020
- Auction (If necessary): January 22, 2020
- Sale Objection Deadline: January 23, 2020
- Sale Hearing: January 30, 2020
Further Background
On December 10th, the Debtors filed a motion requesting each of a bidding procedures order and a sales order in relation to the sale of the Debtors’ Taylor Express assets (the “Taylor Sale”). According to the Debtors, who bought the North Carolina-based company for $49.0mn in 2015, "Taylor Express provides expert bulk transportation services, focused on high-quality, best-in-class customer service in the South and Southeast regions." Taylor Express describes itself as "a leading carrier in the tire and rubber industry, providing dedicated services on critical raw materials for the tire industry and many other well known companies like Kohler, Lowes Hardware and Purolator…"
The motion states, “Unfortunately, the majority of the Debtors’ assets will shortly be liquidated, owing to a combination of industry headwinds, an overleveraged debt structure and the legacy impact of an extensive governmental investigation of the Debtors’ prior management. One of the Debtors’ business operations, Taylor Express, likely has substantial value as a going concern. Accordingly, through this Motion, the Debtors seek authority to quickly commence and implement a process to sell substantially all of the assets of Taylor Express as a continuing and ongoing business (the “Taylor Assets”).”
The motion continues, “Prior to the commencement of these Cases, the Taylor Assets were extensively marketed to potentially interested third parties, including business discussions, including telephone calls, in-person meetings between and among senior management, the parties’ legal teams, and the parties’ various advisors, which marketing efforts are still ongoing.
Based on the extensive diligence, the Debtors, in consultation with their advisors, have determined that filing the Asset Purchase Agreement, which will allow potential bidders to mark-up the Asset Purchase Agreement and submit proposals, and the continued marketing of the Taylor Assets, is the best and most efficient way to maximize the value of the Taylor Assets for the Debtors, their estates, creditors of their estates, and all parties in interest. This expedited process is required due to the Debtors’ overall liquidity constraints and the difficulty of maintaining Taylor Express as a going concern in the midst of the liquidation of the balance of the Debtors’ assets.
The Debtors seek authority to proceed with a bidding and auction process, in order to market-test Asset Purchase Agreements proposed by potential bidders, and sell, pursuant to and in accordance with the Bidding Procedures, the Taylor Assets to the bidder submitting the highest or otherwise best bid for the subject assets free and clear of claims, liens encumbrances and interests of others.
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The post Celadon Group, Inc. – Executes APA with Affiliate of Luminus Management in Respect of $14.5mn Sale of Taylor Express Inc; Sale Hearing Set for January 30th appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.