Files Objection in Diamond Case; Motions for "Setoff Rights" to
Automotive Component Holdings LLC (ACH) has filed an objection
in the bankruptcy case of Diamond Glass. The company, whose glass
holdings were sold to Zeledyne LLC earlier this week, objects to
the court's interim order:
- "authorizing incurrence by the debtors of post-petition secured
indebtedness and with administrative superpriority;
- granting liens;
- authorizing use of cash collateral by the debtors … and providing
for adequate protection;
- modifying the automatic stay; and
- scheduling a final hearing.
ACH has an unpaid "prepetition contract claim" against Diamond
in the amount of $572,327.32 "for glass that [it] sold and delivered
to Diamond Glass before the commencement of this case," according
to a court document filed yesterday. (Objections were due at 4 p.m.
However, ACH notes that its prepetition claim is secured, "by an
offsetting, prepetition mutual indebtedness in the amount of approximately
$350,483.07 that ACH owed to Diamond Glass for glass replacement
services performed by Diamond Glass for ACH before the commencement
of this case." It also claims that its "setoff rights are entitled
to adequate protection under Bankruptcy Code the same as any other
interest in property of the bankruptcy estate."
The document also notes, "ACH objects to the Debtors' DIP Financing
Motion to the extent that it seeks authorization to grant the Debtors'
prepetition and postpetition lenders liens or security interestes
in the account owed by ACH to Diamond Glass with priority over ACH's
setoff rights with respect to the account because ACH's interest
in the accounts is not adequately protected."
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