Subscribe to glassBYTEs!

ACH Objects to Diamond Assets Sale

Automotive Component Holdings Inc. (ACH) has filed an objection to Diamond Glass' motion for approval of a proposed sale of its assets. (CLICK HERE for related story.) In addition, Connecticut General Life Insurance Co., local tax authorities in Texas, and D.L. Peterson Trust, which leases vehicles to the Kingston, Pa.-based company, also filed objections to the motion.

In its objection, ACH notes that in the motion for approval of the sale, "all 'Encumbrances' to the assets proposed to be sold are 'to attach only to the proceeds of the sale (if any) with the same priority, validity, force and effect, if any, as they now have in or against the Assets, subject to all claims and defenses the Debtors may possess with respect hereto …"

ACH alleges that this provision "is not sufficient to provide adequate protection for [its] setoff rights, because there has been no provision made for the allocation of the sale proceeds between the accounts receivable owed by ACH to the Debtors and the other assets to be sold, and therefore the portion and adequacy of the sale proceeds proposed to act as substitute collateral for ACH's setoff rights cannot be determined." (CLICK HERE for related story.)

ACH requests that the motion be denied, and that the court "condition the sale as is necessary to provide adequate protection for [its] setoff rights."

CLICK HERE for full text of ACH objection.

Need more info and analysis about the issues?
CLICK HERE to subscribe to AGRR magazine.