Textron Financial Corp. and Textron Financial Canada filed an objection to Genmar Holdings' motion relating to the sale of the company, saying Genmar needs to be more open in relating details of the sale process.
Genmar's motion, which was filed last Friday, was the first public announcement that it had "abandoned any hope for a successful reorganization and instead turned their focus and attention solely toward effectuating one or more sales of their assets," Textron said in papers filed Tuesday with U.S. Bankruptcy Court in Minnesota.
In its filing, Genmar asked the court for expedited approval of an agreement with an unidentified "potential stalking horse." That agreement, among other things, would grant this party a "lock up" for approximately 20 days and a "commitment by the estates in the nature of an expense reimbursement in an amount up to $700,000."
A hearing on Genmar's motion is set for this morning.
Calling Genmar's liquidation announcement the "most significant development in these cases since their commencement approximately five months ago," Textron said Genmar is shrouding the sales process in secrecy and depriving the court and interested parties of basic information about the process.
Textron, which said it is likely the single largest unsecured creditor in the case, believes the "secret approach proposed by the debtors renders both [Textron] and the court incapable of performing an effective evaluation of the reasonableness of the relief requested."
In court documents, Genmar said it has identified a "potential stalking horse," the "party that has submitted the best offer to date from the standpoint of cash consideration and probability of consummation." It does not, however, identify that party in order to "preserve the integrity of the sale process."
Though Genmar had been looking at other options, according to court documents, the "potential stalking horse believes that pursuit of both strategies will be dilutive of management's efforts. Therefore, it has demanded that debtors enter into the exclusivity and expense agreement."
Genmar Holdings chairman Irwin Jacobs has confirmed he is a bidder for the company. No other bidders have been publicly identified.