Comcar Industries, Inc., and its affiliated debtors ask the U.S. Bankruptcy Court for the District of Delaware to authorize the procedures for the sale of their remaining assets and de minimis assets.
The Debtors commenced their cases to wind-down their operations and effectuate a sale of substantially all of their assets. To that end, the Court has entered orders authorizing the sales of substantially all of the assets of CT Transportation, LLC, CTL Transportation, LLC, and MCT Transportation, LLC. The Debtors will ask approval of sales of substantially all of the assets of CCC Transportation, LLC and Commercial Truck and Trailer Sales, LLC at the hearing scheduled for Aug. 21, 2020 (“Asset Sales”).
To support their efforts to wind-down their business operations, by the Motion, the Debtors ask to establish procedures to sell their remaining assets in one or multiple sales and to establish procedures for the sale of assets with a fair market value of under $500,000. Following consummation of the Asset Sales, the Remaining Assets and the De Minimis Assets will constitute substantially all of the assets of the Debtors. The sale of the Remaining Assets and De Minimis Assets will free and clear of all liens, claims, interests, and encumbrances.
Recognizing their limited liquidity and fragile operational state, the Debtors and their advisors have already commenced an initial marketing process that asks to: (i) identify the remaining assets that individual buyers wish to acquire, (ii) the purchase price and other consideration for these assets, (iii) any material conditions to a purchase and (iv) the diligence required by the respective buyers.
Further, the Debtors will make available, if necessary, a form of asset purchase agreement, similar to that made available to potential purchasers pursuant to the Asset Sales. Finally, potential purchasers have been made aware that the Debtors intend to move forward expeditiously with the marketing and sale of their assets, subject to higher and otherwise better offers, in consultation with the Committee and the DIP Agent, and the Debtors’ obligations to maximize the value of their assets.
The Debtors ask that they’d be authorized to market and consummate the sale or transfer of the Remaining Assets, in one or several lots and in any individual transaction or series of transactions to a single buyer or group of related buyers, for which the Debtors have determined, in the reasonable exercise of their business judgment, in consultation with the Consultation Parties, that such transaction(s) is in the best interest of their estates; provided that the Debtors adhere to the following procedures:
(a) The Debtors are currently marketing the Remaining Assets and may continue to market each Remaining Asset until sold subject to a sale order entered by the Court (a “Sale Order”).
(b) Any bid submissions to the Debtors pursuant to the Remaining Asset Sale Procedures must be directed to the Bid Notice Parties.
(c) In the exercise of their reasonable business judgment, and upon receiving approval from the Committee and the DIP Agent, the Debtors will be authorized to accept a bid to purchase a Remaining Asset or Remaining Assets by executing a purchase agreement, provided that such Bid meets the following requirements:
i. Each Bid must clearly state which Remaining Assets the bidder is offering to purchase.
ii. Each Bid must clearly set forth the purchase price to be paid. The Debtors reserve the right to accept or reject any Bid.
iii. With a Bid, a bidder must submit by wire transfer of immediately available funds, a cash deposit in the amount not less than 10% of the aggregate Purchase Price set forth in the Bid, to be held in a noninterest-bearing account to be identified by the Debtors.
iv. Each Bid must expressly identify the liabilities, contracts and leases (if any) related to such Remaining Asset or Remaining Assets that the bidder desires to (A) assume or (B) provide for or satisfy, including cure amounts as required under section 365 of the Bankruptcy Code.
v. A Bid will not be conditioned on (A) obtaining financing, (B) shareholder, board of directors, or other internal approval, or (C) the outcome or completion of a due diligence review by the bidder.
vi. Each Bid must fully disclose the identity of each entity that will be bidding or otherwise participating in connection with such Bid, and the complete terms of any such participation.
(d) Sale Notice and Objection Period: The Debtors will file a certificate of counsel. If only one acceptable Bid is received, the Debtors may file a Certification of Counsel asking approval of such Bid, or if multiple Bids are received, the Debtors may file a Certification of Counsel asking approval of the highest or otherwise best Bid or proceed to conduct an Auction. After 10 calendar days after filing the Certification of Counsel, without objection, the Debtors may file a certificate of no objection attaching a proposed order approving the purchase agreement attached to the Certificate of Counsel. If the Debtors have previously received alternate Bids for certain Remaining Assets, or within the Notice Period receive higher or otherwise better Bids, they may conduct a telephonic or other style of auction that will proceed under procedures and on a date and time that will be set in the Debtors’ discretion, in consultation with the Consultation Parties. At the conclusion of the Auction, the Debtors will file a Certificate of Counsel. If a written objection to any such Certification of Counsel is filed with the Court within the Notice Period, then the relevant Remaining Assets will only be sold or transferred upon submission of a consensual form of order resolving the objection as between the Debtors and the objecting party or further order of the Court after a hearing, which will be not later than the next omnibus hearing after the submission of any such objection.
(e) At all times prior to the entry of a Sale Order approving the sale of a Remaining Asset, the Debtors will reserve the right to exercise their fiduciary duties and terminate a purchase agreement.
(f) All Remaining Asset sales will be free and clear of any and all liens, claims, encumbrances and interests.
With regard to sales or transfers of the De Minimis Assets in any individual transaction or series of related transactions to a single buyer or group of related buyers with an aggregate selling price equal to or less than $500,000:
(a) The Debtors are authorized to consummate such transaction(s) if the Debtors determine in the reasonable exercise of their business judgment that such sales or transfers are in the best interest of their estates without further order of the Court or notice to any party; and
(b) Any such transaction(s) will be free and clear of all liens, with such liens attaching only to the sale or transfer proceeds, if any, with the same validity, extent, and priority as had attached to the De Minimis Assets immediately prior to such sale or transfer.
(c) The Debtors will give De Minimis Sale Notice upon the De Minimis Notice Parties.
(d) If no written objections from the De Minimis Notice Parties are filed with the Court within seven days after service of such De Minimis Sale Notice, then the Debtors are authorized to immediately consummate such sale or transfer;
(e) If any De Minimis Notice Party files a written objection to any such sale or transfer with the Court within seven days after service of such De Minimis Sale Notice, then the relevant De Minimis Asset will only be sold or transferred upon submission of a consensual form of order resolving the objection as between the Debtors and the objecting party or further order of the Court after notice and a hearing.
(f) All De Minimis Asset sales will be free and clear of any and all liens, claims, encumbrances and interests.
Additionally, during these chapter 11 cases, the Debtors will provide a written report or reports, within 30 days after each calendar quarter (to the extent De Minimis Asset Sales were consummated for the relevant quarter), concerning any such sales or transfers
made in accordance with the relief requested in this Motion (including the names of the purchasing parties and the types of amounts of the sales) to the De Minimis Notice Parties and those parties requesting notice under Bankruptcy Rule 2002.
The relief requested in the Motion will best position the Debtors to maximize the net value of the Remaining Assets and the De Minimis Assets for their benefit, their estates, their creditors, and other parties in interest.
The Debtors are asking relief from the stay imposed by Bankruptcy Rule 6004(h) for the private sale.
A hearing on the Motion is set for Aug. 21, 2020 at 2:00 p.m. (ET). The objection deadline is at the hearing.
About Comcar Industries
Comcar Industries is a transportation and logistics company headquartered in Auburndale, Fla., with over 40 strategically-located terminal and satellite locations across the United States. For more information, visit https://comcar.com/
On May 17, 2020, Comcar Industries and related entities sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In the petitions signed by CRO Andrew Hinkelman, Comcar Industries was estimated to have $50 million to $100 million in assets and liabilities as of the bankruptcy filing.
The Hon. Laurie Selber Silverstein is the presiding judge.
The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting, Inc. as financial advisor; and Bluejay Advisors, LLC as investment banker. Donlin Recano & Company, Inc. is the claims agent.