A U.S. judge on Monday rejected a chapter 11 plan for Boomerang Tube, a pipe maker for the oil industry, in a bankruptcy that shed light on the aggressive tactics of its private equity owner and hedge fund lender, Reuters reported on Tuesday. The bankruptcy pitted the company's owner, billionaire Leonard Blavatnik's Access Industries, and hedge fund lender against its unsecured creditors, who attacked the strategies often used in debt restructurings. In a court filing, the unsecured creditors accused debt investor Black Diamond Capital Management of joining with Access Industries to use bankruptcy to grab control of the company and protect themselves from potential lawsuits. The unsecured creditors convinced Bankruptcy Judge Mary Walrath that Boomerang Tube was undervalued, priced at a historic trough in the oil industry that company serves. They argued that low valuation was used to justify paying them virtually nothing. Read more.
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