Court overrules Enesco sale objection
Staff -- Home Accents Today, 2/1/2007
The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, overruled all unresolved objections to Enesco's motion for relief, including that filed by an ad hoc committee of Enesco stockholders. The Court approved the proposed bidding procedures, and held that any qualified bidder must submit a bid by Feb. 12. Under the existing offer, an affiliate of private equity firm Tinicum Capital Partners II LP would forgive the company's secured debt, take on certain unsecured debt, and pay $600,000 in cash, but Enesco shareholders would not receive any distribution. If an auction is necessary, it will be held Feb. 14.
An ad hoc committee of equity holders had filed an objection to the sale of Enesco Group's business, operations and assets over concerns the completed sale would provide nothing for shareholders. The committee says it represents the group that stands to lose or benefit the most from the Enesco Group's proposed sale to Tinicum.
The objection claims the foreign businesses of Enesco have substantial value and that the rush to sell based on performance of the domestic division is unwarranted.
On Jan. 22, the court approved bidding rules for the sale of Enesco's assets at an auction scheduled for Feb. 14 and gave interim approval for a $65 million debtor-in-possession financing arrangement with Wells Fargo Foothill.
The arrangement, in which Tinicum has purchased a 100% participation interest, provides for a revolving loan facility of up to $65 million, the proceeds of which will be used to pay off Enesco's existing senior secured debt and provide working capital until closing of a sale to the Tinicum affiliate. The court will consider final approval of the loan at a hearing scheduled for Feb. 7, according to an Enesco release.
| Acknowledgements | ||
| Meredith Schwartz of Gifts & Decorative Accessories magazine contributed to this article. | ||
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