The U.S. Bankruptcy Court approved International Shipholding’s motion for (i) an order establishing bidding procedures and (ii) an order or orders approving the sale of the Debtors’ assets in the specialty business segment.
As previously reported, “By this motion, the Debtors seek to continue the process that has been in progress for the past three months to maximize the value of their estates through a sale of the Assets. As the Court is aware, pre-petition, in July of 2016, the Debtors launched a formal marketing process, led by Blackhill, for the potential sale of substantially all of the Debtors’ assets. That marketing effort has continued in earnest since the Petition Date and has culminated in a fully negotiated Stalking Horse Agreement with the Stalking Horse Purchaser for the Debtors’ Specialty Business Segment, which represents the highest and best offers that the Debtors have received for these Assets to date. The Debtors wish to continue this effort through a competitive marketing process in the form of an auction for all or substantially all of the Assets, in which the proposed Sale Transaction will be subject to higher and better offers.”
Court-filed documents continue, “The Stalking Horse Purchaser is substantially owned by Erik L. Johnsen, the C.E.O. of the Debtors and an insider of the Debtors. Nevertheless, negotiations of the Stalking Horse Agreement were conducted at arms’ length, with the Debtors interests being represented by Blackhill and Manuel Estrada, the Debtors’ C.F.O. Mr. Johnsen and his family members were not privy to the Debtors’ consideration of the competing bids for the Assets. As a result of the arms’ length negotiations, the Stalking Horse Agreement represents a substantially higher purchase price for the assets than any other proposed purchase. The Debtors also believe that the Stalking Horse Agreement represents a lower execution risk, and indeed, the Stalking Horse Purchaser has already provided its $1.8 million deposit. The deadline to submit qualified competing bids is December 8, 2016, and – if one or more qualified bids are received – a December 15, 2016 auction and a December 20, 2016 sale hearing will follow.”
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