While American Glass Enterprises, an affiliate of Sun Capital, emerged as the successful bidder to purchase the assets of Vitro America and Binswanger Glass during an auction last week, creditors PGW and GTS have filed objections “to the proposed cure amounts with respect to the assumption and assignment of certain executory contracts in connection with the contemplated sale of substantially all of the debtors’ assets to American Glass Enterprises LLC.”
PGW alleges in its objection that in American Glass’s Assumption and Assignment Notice, it lists Vitro America’s contract with PGW as a designated contract, with the proposed cure amount of $289,000 for its sales and distribution agreement with the company. However, PGW claims that if American Glass decides to assume the PGW contracts, “the amounts necessary to cure all existing pre-and post-petition payment defaults under the PGW sales and distribution agreement are substantially higher than the amounts scheduled by the purchaser … ” As of June 3, PGW alleges that its existing receivable from Vitro totals approximately $1.8 million. The breakdown of the amount comes from a pre-petition claim of $4,501.93 prior to November 30, 2010; a gap period claim from November 30, 2010, through April 5, of $656,098.65; and a post-petition claim from April 6 to present of $1,101,350.45.
Similarly, GTS, which is a part of PGW, claims in its objection that American Glass has listed cure amounts of $17,281 for its GlasPacLX eXpress Service, and $109,000 for its GlasPacLX Onlive Service Agreement dated September 30, 2009. GTS officials, however, claim a total cure amount of $242,288.93. The suggested cure amount is made up of a gap period claim of $179,584.60 and a post-petition claim of 62,704.33.
Both objections are noted as “limited.”
“PGW is hopeful that any issues related to the cure claim and the assumption of PGW contracts will promptly be resolved with the debtors and the purchaser without the need for litigation,” writes Thomas R. Fawkes of Chicago-based Freeborn & Peters LLP. “Nevertheless, out of an abundance of caution and in light of the rapid pace of the debtors’ sale process, PGW files this limited objection, and further reserves its rights to assert additional objections in the event the purchaser fails to timely remit the full cure claim in accordance with the bankruptcy code.”
The GTS objection includes similar language, and also was filed by Fawkes.
Both objections were filed today in the U.S. Bankruptcy Court for the Northern District of Texas. At press time, neither American Glass Enterprises nor Vitro America had responded to the objections.