Diamond Makes Changes to Bid Procedure to Accommodate Belron Requests

Diamond Glass counsel Michael Richman of Foley & Lardner told the court the company made some changes to the planned bid procedures "to accommodate concerns raised by one potential bidder, which is Belron" during a recent hearing in Diamond's bankruptcy case.

"We agreed to eliminate the option that we would have to conduct any part of the auction under a sealed bid procedure," Richman said. "In addition, we made clear that the parties who initially are entitled to receive bids will not disclose them to parties who are not initially entitled to receive bids, amplifying the confidentiality of the process and the fairness of it."

He added, "We also agreed to condition our exercise of discretion with the word 'reasonable.' And we agreed to provide reasonable access to management for all potential bidders prior to the bid deadline."

Diamond has received inquiries from more than 40 parties through its investment banker, National City, according to court documents.

" … We have high hopes that there will be lively and competitive bidding for the company," Richman said. National City has contacted 178 potential buyers, has received 46 requests for confidentiality agreements and has sent executive summaries to 41 prospective purchasers, according to court documents.

Richman also advised the court that Guggenheim, Diamond's senior secured lender, has reduced its aggregate credit bid.

"[Guggenheim] has agreed that [it] will not credit-bid the portion of [its] claim that is covered by the guarantee from Kenneth Levine," he said. "So, there's approximately $10 million that [it] will not credit-bid … which then reduces [its] maximum from roughly $52 to roughly $42 million."

CLICK HERE for full text of hearing transcript.

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