The sale of bankrupt NanoMech was approved by a judge Monday after the company's buyer and the U.S. government hashed out contract language that stalled the process last week.
During a status conference in Delaware, attorneys for Springdale-based NanoMech, P&S Holdings, and representatives of the U.S. government told the court they had hammered out new wording for the sale order that was agreeable to everyone. Bankruptcy Judge John Dorsey said he applauded the efforts of those who worked through the weekend to reach a resolution.
Later in the day, Dorsey signed a revised sale order that included the agreed-upon changes and, among other provisos, a deficiency claim by creditor Michaelson Capital Partners against NanoMech's estate for $5.09 million. According to court documents, Michaelson and P&S made a deal to have P&S take up a portion of Michaelson's pre- and post-petition debt and replace Michaelson as the primary bidder for NanoMech's assets.
The court had approved P&S Global Holdings' $8 million offer as the only successful bid for NanoMech's assets, free and clear of liens and other legal encumbrances. P&S is a subsidiary of Houston-based Vinmar International Ltd., a global marketing, distribution and project-development company serving the petrochemical industry.
Last week, at a hearing to approve the sale of the company, P&S Global Holdings argued that the wording requested to protect U.S. interests after the sale was too broad. At the time, an attorney representing the U.S. attorney's office said the language was standard and necessary to protect the government's rights.
Dorsey adjourned that hearing to give an P&S Global an opportunity to weigh its options. Prior to that, Dorsey said he was inclined to sustain an objection to the sale by the U.S. government if an agreement on the wording couldn't be reached.
Earlier this month, the U.S. attorney's office, on behalf of the Department of Defense, objected to plans to sell NanoMech, contending the deal gave the buyer too much leeway with contracts and other possible entanglements with the government. According to the filing, the company is party to at least one contract with the Department of Defense, though it is not listed in NanoMech's initial bankruptcy documents.
NanoMech filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware in April. NanoMech claims $7.2 million in assets and owes nearly $19 million to its creditors, according to bankruptcy filings. The 12 secured claims include Michaelson Capital for $8.95 million and Arvest Bank for $1.55 million, as well as $1 million to the Arkansas Economic Development Commission. There are 166 unsecured creditors.
With the approval of bankruptcy court, NanoMech is acting as a debtor in possession, which allows the business to operate normally as the bankruptcy unfolds.
Business on 07/30/2019
Print Headline: Bankruptcy judge signs revised order to sell NanoMech