The bankruptcy judge overseeing Potomac Supply’s Chapter 11 reorganization case has continued the hearing on Regions Bank’s motion to move the company into Chapter 7 liquidation until April 20.
The Kinsale-based company was in court on March 23 to opposed the bank’s motion. William Carden, CEO of Potomac Supply, said that several Potomac Supply employees attended the hearing to show their support of the company’s efforts to remain open and emerge from bankruptcy.
Two witnesses presented evidence before the judge continued the hearing to the end of April.
In a motion filed on behalf of Potomac Supply, Jerry Hall, an attorney for Potomac Supply, states that Regions’ motion is “extremely premature, lacks merit and should be denied.”
The court document states that Potomac Supply has been in bankruptcy for 60 days and has “already enhanced certain of its business lines” and “has a steady supply of customer orders…”
“Regions has made no secret of its long-standing desire to have Potomac… liquidated,” Hall wrote in the objection. “[T]he Motion is simply the latest step in Regions’ scorched-earth approach to obtaining such a result.”
Attached to the motion, the company presented statements from 17 individuals and companies stating an objection to Regions’ desire to move into liquidation and voicing support for Potomac’s continued efforts to reorganize.
“Each of these creditors believes Potomac should remain in chapter 11 under existing management and be given the opportunity [to] reorganize,” Hall wrote. “Each creditor further believes that its best chance to recover value in this case and in the future comes from permitting Potomac to operate as a going concern under existing management.”
Hall’s objection also reveals that Potomac’s efforts to sell the business is going well.
“Potomac has spoken to interested parties and anticipates seeking, in relatively short order, Court-approval of a broker or investment banker and/or procedures… for pursuing an consummating one or more transactions designed to pay Potomac’s creditors,” Hall wrote. “Potomac is taking necessary steps to reorganize, expects to confirm a chapter 11 plan and should be given a legitimate opportunity to do so.”
The judge is expected to make a decision on the matter following the April 20 hearing.