In The News
IdleAire may have buyer
It's looking like IdleAire, which declared Chapter 11 bankruptcy Monday, may have a buyer waiting in the wings.
The Knoxville News Sentinel, which has been following IdleAire's financial problems closely, reported that the corporate name IdleAire Acquisition LLC was reserved in Delaware the same day IdleAire Technologies filed for bankrupty protection in that state.
A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. The court can grant complete or partial relief from most of the company's debts and its contracts.
Often, if the company's debts exceed its assets, at the completion of bankruptcy the company's creditors end up with ownership of the newly reorganized company.
This could well be what happens with IdleAire. According to the bankruptcy petition, as of December 31, IdleAire had $210.9 million in assets but total debts of $303.6 million.
The bankruptcy filing lists as the main creditors a group of unnamed lenders represented by Wells Fargo Bank, which at the end of April provided a line of credit up to $25 million. As part of the agreement, IdleAire hired a major turn-around management and restructuring consultant, CRG Partners Group.
According to court papers filed in relation to the bankruptcy petition, the credit agreement relating to the bridge loan "expressly envisions" further funding in the form of debtor-in-possession financing, and also says that "IdleAire's obligations in connection with the … bridge loan are secured by a first priority lien on essentially all of its assets."
So these unnamed lenders could well be IdleAire's new owners.