The U.S. Trustee assigned to the Dakota Plains Holdings case filed with the U.S. Bankruptcy Court separate expedited objections to the Debtors’ motions seeking approval of (1) certain bid procedures and an auction for substantially all of the Debtors’ assets and (2) an interim agreement for post-petition secured financing and use cash collateral.
The bid procedures’ objection asserts, “The U.S. Trustee objects to the Bid Procedures motion because it is not clear that an expedited hearing is necessary. It appears that the assets to be sold are not now being used in the operation of any business. The purchase and sale of oil has been halted for over a month. Nothing indicates that the assets are losing value….The U.S. Trustee objects to the substantive provisions of the proposed sale, insofar as the motion contemplates the sale of avoidance actions. There is no basis for the court to approve such a sale, which would presumably preserve for the benefit of the purchaser, the right to bring avoidance actions against third parties.”
The financing objection states, “The U.S. Trustee objects to approval of the interim use of cash collateral because the motion does not comply with the requirements of the bankruptcy code or rules. Specifically, the record is not clear regarding the cash needed by the debtors to avoid immediate and irreparable harm, pending a final hearing….If, in fact, the majority of the $500,000 interim loan will be used to pay off the pre-petition lender’s ‘unpaid fees, disbursements, legal and advisory expenses’, owed to SunTrust, that fact should be clearly disclosed and parties should have an opportunity to interpose further objections.”
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