Maxim's Reorganization Plan Rejected

October 20, 2004 • Pittsburgh, Pa.-based Maxim Crane Works' prenegotiated reorganization plan has been rejected by a U.S. bankruptcy court judge, and the company has been ordered to liquidate its assets, according to TheDeal.com. The judge also directed unsecured creditors to work with Maxim to come up with a sale process.

 

The move has led Albert Bove, Maxim's former chief executive officer, and AmQuip Corp., Bensalem, Pa., to withdraw the motion to terminate Maxim exclusivity, so they could file their own reorganization plan. Bove and AmQuip hope to become Maxim's stalking horse bidder with an offer of $273 million.

 

”We withdrew our motion because we achieved our objective,” said Michael Kaminski, counsel for Bove and AmQuip at DKW Law Group. “The judge made clear that the company is in play, and it's up for sale."

 

Before the judge's decision, Bove and AmQuip most likely would face a fierce court battle before being considered as an alternative to the prepack. According to Kaminski, everyone was closed out up until the hearing. “Now we can get in and do due diligence,” he said. “AmQuip is still very interested in pursuing a purchase." Kaminski said there would likely be negotiations over the $273 million offer for Maxim.

 

Under Maxim's prepack, the company's secured lenders proposed cutting $700 million in debt by more than half in return for a majority stake in the reorganized company. By rejecting the prepack the judge also postponed considering Maxim's disclosure statement. No date was determined for a hearing on the matter.

 

Maxim filed for protection June 14 in Pittsburgh; Boston, Mass.-based buyout firm Bain Capital LLC controls the company.