Former Standard Register Fights Charges Made by Silver Point Finance
One of Standard Register Co.’s biggest lenders isn’t happy with the procedure the company is using to shed assets as it undergoes Chapter 11 bankruptcy.
Silver Point Finance, a subsidiary of Connecticut-based hedge fund Silver Point Capital, filed an objection last Wednesday charging that SRC Liquidation Co., what’s left of Standard Register Co., was looking to divert millions of dollars in “wind-down fees,” expected to help boost the value of the remaining assets for the benefit of creditors, to new owner Taylor Corp., according to Dayton Business Journal.
“Because unused wind-down funds must be refunded to Taylor, the debtors are effectively proposing to return value to Taylor ahead of their secured creditors,” said the filing, which was obtained by the newspaper.
On Thursday, SRC Liquidation Co. made some allegations of its own, claiming that Silver Point Finance is simply trying to get around an agreement and secure more than $1 million for “manufactured issues” in the Chapter 11 case, the newspaper said.
“Silver Point’s objection is predicated entirely on the false premise that the debtors will be abdicating their fiduciary duties by selling or abandoning (certain) assets that have little or no value,” SRC Liquidation attorneys said in the latest filing, as reported by Dayton Business Journal. “This position is puzzling given that the Bankruptcy Code expressly authorizes debtors to ‘abandon any property of the estate that is burdensome to the estate or that is of inconsequential value and benefit to the estate.'”
Silver Point Capital made the $275 million initial bid to buy Standard Register Co. at auction. Taylor Corp., who already owns several other major print and promotional companies, including ADG Promotional Products, Navitor and Label Works, and Amsterdam Printing, ultimately proved victorious.