Chapter 11 Filed After Company Admitted To An Astounding $170 Million In Debt
The Bankruptcy Judge overseeing Icon's convoluted Chapter 11 process has approved $9 million in Chapter 11 financing and set a June asset auction for the Icon A5 Program -- and said that objections had apparently been resolved (for the moment) by shareholders who claimed (not surprisingly) that Icon was being sold to an 'insider.'
Judge Craig T. Goldblatt gave final approval to Icon's (DIP) debtor-in-possession financing and approved the sales schedule... but has yet to approve that previously disclosed stalking horse bidder -- according to an agreement reached with those shareholders who contested the proceedings.
Icon bailed out and went for Chapter 11 last month after admitting to an astounding $170 million in debt. The company claimed that it wanted to sell its assets and liquidate the program as the debt became so ponderous... though this was unlikely to have been a process they couldn't have seen from FAR away.
Earlier this week, the Judge approved Icon's use of $4 million of its requested $9 million debtor-in-possession loan received from FeiRen International Co. Ltd.
A number of shareholders took potshots right away at Icon's plan to sell, as well as the DIP arrangement... including one of the folks widely blamed for leaving Icon into the massive issues it ultimately faced... company co-founder and former CEO Kirk Hawkins — who sued in Delaware Chancery Court claiming that Icon's majority equity holder, Shanghai Pudong Science and Technology Investment Co., was trying to piece out the company and somehow takeover its intellectual property (for whatever good that may have done them...) and then transfer it all to China.
Such charges have been denied.
But plenty of heartburn remained going into the most recent hearing... "There needs to be more time to consider what appears to be an insider sale trajectory," said Sean Mitchell, shareholder counsel during Wednesday's proceedings.
Icon and the shareholders have now reportedly agreed on procedures of the sale, while the shareholders agreed to drop their objections -- and all this while Icon removed the somewhat controversial selection of the stalking horse bidder -- a matter that will be resolved, maybe, later this month.
The resulting agreement allows for an auction to be held June 13 and a sale hearing June 18 -- unless contested -- in which case the hearing will be delayed until June 27.
More info info to come...