Creditors, USW raise objections before Barzel assets auction

Oct 27, 2009 | 12:32 PM | Corinna Petry

New objections have been raised in the run-up to the bankruptcy court-ordered auction of Barzel Industries Inc.'s assets by the end of this month.

The official committee of unsecured creditors, the United Steelworkers union, Dallas County in Texas and the Ports of Indiana each filed limited objections to the release of obligations under the proposed sale.

The creditors committee filed a limited objection to approving the release under the asset purchase agreement of pre-petition claims against the Barzel estate. Previously, the U.S. Bankruptcy Court for the District of Delaware had dismissed the committee's full objection, which sought to delay the proposed asset sale until it could properly investigate the assets and other matters related to the bankruptcy proceedings.

The committee argues that the timing of approval of the release "substantially prejudices the committee's investigation rights; (that Barzel) failed to seek proper statutory approval for the release of pre-petition claims; (and that it) failed to satisfy the appropriate test for selling the release as an asset of its estates outside the ordinary course of business."....