Diamond Vendor Payment Motions Approved

The judge overseeing Diamond Glass' bankruptcy case in the District of Delaware approved two motions involving payments to its vendors this week.

In one of the motions, the court granted the company authorization to pay certain critical vendors and freight carriers at a cap of $6 million. This motion previously was granted on an interim basis, but this order grants it on a final basis.

Judge Christopher Sontchi also approved Diamond's motion for authorization to pay certain prepetition claims of suppliers and vendors of goods "entitled to administrative priority."

The terms of the payments are as follows, according to court documents:

• "Priority Vendors shall have administrative expense claims with priority … for those undisputed obligations arising from shipments of Goods delivered, received and accepted by the Debtors in the ordinary course of business within the 20 days before the Petition date;"
  
  
• "The Debtors are authorized, but not directed, to pay, in the ordinary course, their undisputed obligations to Priority Vendors who have an administrative expense claim with prority … for those undisputed obligations arising from shipments of Goods delivered, received and accepted by the Debtors in the ordinary course of business within the 20 days before the Petition Date in an amount not to exceed $3.0 million;" and
  
  
• "The Debtors are authorized, but not directed, to undertake appropriate effforts to cause Priority Vendors to enter into agreements with the Debtors as a condition of payment of each such Priority Vendor's Priority Vendor Claims …"

The order also authorizes Diamond to make payments on account of a priority vendor claim "if the Debtors determine, in their business judgment, that failure to pay such Priority Vendor Claim is likely to result in irreparable harm to the Debtor's business operations." In court cases such as this one, the list of critical vendors often is considered proprietary and is not released. So far, it has not been made available publicly in the Diamond case.

CLICK HERE for full text of order.

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