Global Fastener News

Court Orders Bankrupt DDI to Entertain Partial Bids

Jason Sandefur

In a potential victory for unpaid vendors, a federal judge ruled that bankrupt Distribution Dynamics Inc. must entertain O”Brien granted a committee motion forcing DDI to accept bids for portions of the company. DDI filed for Chapter 11 bankruptcy on April 26, three days after signing a $25 million purchase agreement with Anixter International. According to court documents, DDI had requested that bids for the company during a June 18 auction be limited to offers for all DDI assets. A group of unpaid vendors, including several prominent fastener suppliers, successfully argued that DDI may be worth more if sold in pieces.
“[DDI”s] businesses can be easily divided into separate and distinct divisions. Accordingly, sale of & businesses on a division-by-division basis may result in a combined, higher and better offer for [DDI”s] assets,” the vendors” contended.
Anixter deal would be worth millions less than the company”s admitted debt of “not less than $29,220,000,” court records state. If outbid, Anixter would receive a $350,000 fee for their part in the deal. Bidding would start at $25.85 million and advance in $500,000 increments. �2004 FastenerNews.com