Should an offer fail to materialize, however, Glass Group will shut down operations and start liquidating the plant's assets.
Meanwhile, the United Steelworkers of America, which represents the plant's hourly employees, and managers at Flat River Glass are working feverishly to make sure that doesn't happen.
They're focused on clearing obstacles faced by Stolzle-Oberglas, an Austrian glass producer that expressed interest in the plant.
The union soon will begin labor-contract negotiations, while the managers are working to expedite the due diligence that Stolzle must conduct before it can make an offer.
Glass Group's plan for a one-week deadline to sell the Flat River Glass factory depends on continued financing by the company's key lender, CapitalSource Finance LLC. If that financing is pulled, Glass Group will be forced to shut down its operations immediately.
The bankrupt company owes more than $38 million to the lender. Although the loan was due on Friday, CapitalSource agreed to extend it until Monday while the Bankruptcy Court in Wilmington, Del., mulls over the case.
Glass Group and CapitalSource had hoped the court would approve the sale of certain assets to German packaging company Gerresheimer Group GmbH at a hearing Friday afternoon. It also wanted to extend temporarily the Capital Source loan until it closed the sale, which is expected to occur before the end of this month.
Gerresheimer Group, which made the only bid in an auction on Thursday, offered to buy Glass Group's glass factory in Millville, N.J., as well as its equity in a glass-manufacturing joint venture in Beijing for $20 million cash and the assumption of $1.7 million in debt owed to employees. Now Glass Group must find buyers for the other assets.
At the hearing, it quickly became clear that opposition from unsecured creditors dissatisfied with the auction process as well as unions seeking to enforce existing labor contracts would prevent a quick decision. The hearing was accessible via a conference call.
The Steelworkers and the Glass, Molders and Pottery Workers Union, which represents many of the workers in New Jersey, have contracts that prevent the sale of assets where their members work unless the buyer accepts the labor contracts. Gerresheimer doesn't want to accept these contracts.
The unsecured creditors and the unions on Friday asked Judge Peter Walsh to consider appointing a Chapter 11 trustee. A trustee would take away control of Glass Group from the company's chairman and chief executive, Ken Rock, and other senior managers.
Friday evening, after more than 2 1/2 hours of testimony and argument, Walsh told the parties to return to court Monday morning.
"If we stayed here until 9 o'clock, I still wouldn't be making a decision today," he said.
At the hearing, Glass Group's financial adviser, Robert Smith, said the company was talking to a potential buyer for Flat River Glass, where about 530 people work. He didn't specify the company, though sources have identified it as Stolzle.
The potential buyer told Glass Group it needed about a week to 10 days before it could be in a position to make an offer, he said.