The official creditors’ committee is opposing initiatives by Neff Corp. and objecting to final approval for a $175-million financing packaging, saying that less than $18 million represents fresh cash, with the remainder entailing converting pre-bankruptcy secured debt into an obligation of the company in Chapter 11, according to Businessweek.com.
The committee is also opposing an executive bonus program, saying the bonuses improperly lock the executives into pursuit of the plan negotiated before bankruptcy. Neff entered pre-packaged Chapter 11 bankruptcy protection last month.
The U.S. Trustee is also opposing the proposed terms for hiring financial advisers, according to the report. The trustee said the professionals wouldn’t have liability for gross negligence or willful misconduct. Also, trustees said, the advisors aren’t required to exercise so-called fiduciary duties and may subcontract work without court approval. The trustee said any attorneys hired to work on behalf of the company must receive court permission to do so. A hearing to consider approving retention of three law firms will be held June 30.
The committee also objects to terms of the $175 million loan because it provides for paying professional expenses and giving new liens to first-lien lenders covering existing debt where the collateral is worth less than the loan.
Neff Corp. has a July 12 hearing for approval of a disclosure statement explaining the Chapter 11 plan designed to reduce debt by more than $400 million. Neff listed assets of $299 million and debt totaling $609 million.
Based in Miami, Neff Rental is No. 16 on the RER 100.