The economic downturn does not seem to be slowing Patriarch Partners LLC.
The
private equity firm has ratcheted up its efforts to acquire the assets
of distressed companies, though not without obstacles.
Patriarch
recently has made strong bids to acquire two companies hanging in
Chapter 11: a $52.7 million bid for consumer electronics manufacturer
Polaroid Corp., and a second, less tangible consideration for the
assets of water cooler maker Zohar Waterworks LLC, which it already
controls.
Patriarch's bid for Polaroid, however, faces some
hurdles. After Patriarch beat out the competition at a March 30
auction, a Minneapolis bankruptcy judge ordered that bidding be
reopened because a separate joint bid from liquidators Hilco Consumer
Capital LP and Gordon Brothers Group LLC was reportedly higher than Patriarch's. Now both sides must submit new bids, and Polaroid, which
entered Chapter 11 a second time when it filed on Dec. 18, must
announce a winner no later than Wednesday.
Meanwhile,
under Patriarch's stalking-horse agreement with Zohar Waterworks, the
PE firm hopes to assume some $72.9 million in prepetition secured loans
it extended to the company before its April 2 bankruptcy filing. It
would also assume a $3.4 million debtor-in-possession loan commitment
as a consideration for the purchase of the debtor's affiliate, B2
International, court documents said. Judge Brendan Linehan Shannon of
the U.S. Bankruptcy Court for the District of Delaware is set to
consider Zohar's bidding procedures on April 17.
The two
bankruptcy court appearances for Patriarch continue a string of
acquisitions. The firm won the assets of Houston-based network
infrastructure services provider NetVersant Solutions Inc. back in
December, paying $130 million at a Dec. 17 auction. It also took home
the operations of pulp mill operator Red Shield Environmental LLC after
receiving court approval Oct. 23 of its $18.88 million bid. And
Patriarch won -- or rather, retained full control of -- rescue vehicle maker
American LaFrance LLC during its bankruptcy that ended in July with a
$184 million credit bid.
Of course Patriarch can't win them all:
It lost bids for bankrupt American IronHorse Motorcycle Co. and
IdleAire Technologies Corp. last year.
- Carolyn Okomo
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