Texas Bankruptcy Court Approves Auction of Vitro America Assets
May 9, 2011
The U.S. Bankruptcy Court for the District of North Texas ruled on Friday that it will permit Vitro America LLC and three other indirect Vitro subsidiaries to sell substantially all their assets, including Super Sky and Binswanger Glass, through an auction, according to reports from Bloomberg. The decision was made during a 9 a.m. hearing in front of Judge Barbara Houser. The bid process is expected to begin in early June.
Vitro America announced in early April that it had entered into an agreement to sell substantially all of the assets of Vitro America, to an affiliate of Grey Mountain Partners LLC, a private equity firm based in Boulder, Colo. However, American Glass Enterprises LLC , an affiliate of private equity firm Sun Capital Partners, which also owns Vitro competitor Arch Aluminum & Glass, placed a bid valued at $2.5 million more than that of Grey Mountain Partners, and requested that it be named the stalking horse bidder in the case.
The sale process has drawn a number of objections thus far, including two last week from the International Painters and Allied Trades Industry Pension Fund and the unsecured creditors committee, which alleged a relationship between Vitro America parent company Vitro S.A.B. and Grey Mountain Partners.
Others have also filed objections, including Oldcastle BuildingEnvelope (OBE). According to court documents, its principal objection is that the proposed purchase price does not appear sufficient to pay its gap claim, which is required to be paid in full pursuant to 11 U.S.C. §1129(a)(9)(A). In its objection, OBE says it supplied Vitro with approximately $500,000 of trade credit for a period of five months after the involuntary petitions were filed.
“Thus, [OBE] holds a Section 502(f) gap period claim (Gap Claim) against the Debtors in the approximate amount of $500,000 and may hold a small amount of pre-petition claims,” according to the documents.
At press time representatives from Vitro America declined to comment. Stay tuned to USGNN.com™ for more updates as they are made available.