Case No. 08-26591-MBM (Jointly Administered).United States Bankruptcy Court, W.D. Pennsylvania.
August 20, 2009
Related to Doc. #312 MEMORANDUM
M. McCULLOUGH, Bankruptcy Judge
The Movant is Viridian Industries, Inc. (“Viridian”). Viridian seeks reimbursement of expenses under 11 U.S.C. § 503(B)(I) as a stalking horse bidder in a going concern sale that took place on February 26, 2009. Viridian seeks reimbursement of expenses of $169,636.74. The Viridian bid was contained in an Asset Purchase Agreement (the “APA”), executed and delivered the night before the Debtor was prepared to file a blank asset purchase agreement with no purchaser named. The Debtor was prepared to do this as a sale date before it had been previously established by the Court. The original Viridian APA, in addition to all other conditions, sought to purchase all assets of the Debtor with a mortgage encumbrance of $3,202,715.46, for a net cash payment of $73,000, with no precise closing date and numerous conditions including, without
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limitation, obtaining senior debt financing for working capital purposes on terms satisfactory to Veridian in its sole discretion.
Other than executing and delivering the APA on the day before the motion for the sale hearing had to be filed, Veridian did nothing more to aid the auction or sale process.
This matter is governed by In re: O’Brien Environmental Energy,Inc., 181 F3d 527 (3rd Cir. 1999). Upon review of the record and arguments, the Court finds that this case is strikingly similar to the facts in O’Brien, except that the initial bid in this case was much lower relative to the final bid than the initial bid inO’Brien. Further, the Veridian APA was subject to a Purchase Price Adjustment, which made it impossible for a competing bidder to determine the actual purchase price in terms of cash until after the transaction had closed. Therefore, the cash value as viewed by any competing bidders was not available to any potential bidders at the time of the Bid Deadline or the Sale Hearing. Finally, the schedules and other disclosure available to potential bidders was prepared by the Debtor — not Viridian.
Against the background of the record, pleadings and argument and the teachings of O’Brien, it is clear that Viridian is not entitled to any reimbursement of expenses. An appropriate order will follow.
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ORDER OF COURT AND NOW this 20th day of August, 2009, consistent with the Memorandum of even date, it is hereby Ordered, Adjudged and Decreed that the Motion of Viridian for reimbursement of expenses under 11 U.S.C. § 503(B)(1) is DENIED.