Judge Criticizes Sirva Bid To Exit Bankruptcy By April 30 19-Apr-08 12:33 pm Judge Peck seems like a very straight forward kind of Judge. Having watched other bankruptcies over the years it seems that Sirva wants to go at breakneck speed to emerge from chapter 11 faster then any other company their size in the history of bankruptcy proceedings. Why is this? Self serving to their needs and not to the classes of creditors they wish to stiff. Glad the Judge is a fair and balanced Judge.
Class Five creditors have as much right as Class four. To just dismiss their claims goes against the whole system.
Let's see how this plays out.
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Judge Criticizes Sirva Bid To Exit Bankruptcy By April 30
Friday 04/18/2008 11:43 AM ET - Dow Jones News
By David McLaughlin
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)-- A judge on Friday blasted Sirva Inc.'s (SIRV) bid to exit bankruptcy quickly, telling the moving company that it could not "put a gun" to his head to get its reorganization plan approved by the end of April.
"I am deeply concerned about the fire-drill aspects of this bankruptcy case," said Judge James M. Peck of the U.S. Bankruptcy Court in Manhattan. "There must be a Plan B because you are not going to put a gun to my head that I have to decide this by April 30."
(This article also appears in Daily Bankruptcy Review, a publication from Dow Jones & Co.)
Sirva, the parent of Allied and North American Van Lines, filed for bankruptcy in February after negotiating a restructuring plan with creditors. Peck was scheduled to begin hearings on Friday to approve the company's plan. It was scheduled to go for two days, but Peck added two more days next to allow for more time.
Sirva offered to tweak its bankruptcy-exit plan this week in a bid to appease a group of unsecured creditors who were slated to get nothing under the plan and were objecting fiercely. Under the changes, they were offered a $3.5 million unsecured note.
The creditors committee said those changes should require Sirva to send its plan back to creditors for voting. Sirva has opposed that idea, saying it said it can't afford to spend more time in bankruptcy.
Marc Kieselstein, Sirva's bankruptcy lawyer, said the modified plan shouldn't have to go out for a vote because the creditors who would get the note would have been wiped out under the original plan.
"There's no downside," he said. "There's no impact whatsoever on their treatment."
The creditors committee also complained Friday that the last-minute changes were unfair because they prepared for the court hearing using Sirva's original plan. Under continuing criticism Friday, Kieselstein said the company would withdraw the changes that affected those creditors and revert back to their treatment under the old plan.
"It's going to pass muster easily either way," he said.
Sirva, based in Westport, Ill., sought Chapter 11 protection on Feb. 5, listing assets of $924 million and and assets of $1.2 billion. Under its bankruptcy plan, the company's pre-bankruptcy lenders wil swap their debt for a 75% stake in the company. Most of its unsecured creditors would be paid in full, but a small subset - the group that could have got the $3.5 million note - would see no recovery.
-David McLaughlin; Dow Jones Newswires; 201-938-4296; david.mclaughlin@dowjones.com
