The unsecured creditors committee, who had vowed oppose Briggs & Stratton’s plan for a fast-track Chapter 11 sale to private equity firm KPS Capital did not file an objection to the transaction by the Sept. 10 deadline, reports the Milwaukee Business Journal. The hearing on the sale plan is scheduled for Sept. 15, and no bids were submitted to compete with the bid from KPS.
According to the report, an attorney for the unsecured creditors had said in an Aug. 31 interview that they planned to challenge the planned sale of the Wauwatosa-based manufacturer to KPS Capital Partners. Robert Stark said at the time his clients remained “very dissatisfied” with the way Briggs & Stratton filed for bankruptcy after negotiating with KPS to serve as the stalking-horse bidder and provide $265 million in short-term financing.
According to the Business Journal:
Milwaukee-area bankruptcy attorneys said it’s likely the attorneys for unsecured creditors are negotiating with KPS Capital and/or Briggs & Stratton in hopes of reaching an agreement that provides some proceeds for their clients.
Typically in these situations the unsecured creditors seek a “carve out” of money in the reorganization plan or sale agreement. Such an agreement would entail Briggs' secured lenders, which are banks led by J.P. Morgan Chase, to agree to share a portion of the sale proceeds with other creditors, said one Milwaukee-area bankruptcy attorney.
The full report can be found here.