Do it Best deal clears hurdle
Lawyers for True Value Company and PNC, a lender for True Value, overcame some objections over the use of cash collateral, it was revealed in a Thursday hearing. That means the parties are moving forward with deal that would see Do it Best purchase assets of True Value, which filed for Chapter 11 bankruptcy protection on Oct. 14.
The court is looking at a new closing date for the out-of-bankruptcy sale of Nov. 22
The Thursday hearing, a recording of which is accessible to the public, began with lawyers for True Value describing the “good news,” and ended with Judge Karen Owens thanking the parties for their efforts on behalf of all the stakeholders affected by the case.
“I so very much appreciate all the hard efforts for what has been happening over the last week and the clients being accommodating to basically putting all their efforts into resolving this matter for all the thousands of stakeholders of this case," the judge said.
She added that she takes it personally when a case of hers doesn’t succeed. “So I’ll sleep much better tonight and I know you will, too,” she said before adjourning.
The tone of the judge's comments on Thursday were significantly improved compared to a week earlier, when she urged the parties to "increase your settlement discussions in earnest" in order to avoid a "costly dispute" that would "not end positively for the estate."
In the hearing on Thursday, the counsel for True Value said he would be presenting documents that reflect an agreement among the debtors, the pre-petition secured lenders and the unsecured creditors. The documents, which would be available for a Nov. 4 hearing, "would resolve the company's request for use of cash collateral and frankly, we hope, provide a path forward for the resolution of this case," counsel said.
Among the terms is that Do it Best would deliver to the lenders a net pay-down of $163 million in cash.
The hearing pointed to a handful of key dates and deadlines as the case proceeds. The new target closing date of Nov. 22 has been moved up from Dec. 16. A sale objection deadline was set at Nov. 8, the same deadline for the buyer—presumably Do it Best, but possibly another bidder—to make written offers of employment to True Value employees. A sale hearing was suggested for Nov. 12.
While the case continues to wind through the courts and questions remain as to the outcome, the lawyers expressed relief that True Value dodged a potential slide toward liquidation.
"It was a very challenging situation," said counsel for the unsecured creditors. "Sanity has prevailed. And there are thousands of employees who are very grateful, not to mention all the other constituencies."
