Point Blank sells assets to Sun Capital Partners for $36.6 million

By Jim Witters

Wilmington, Del., Oct. 28 - Point Blank Solutions, Inc. received court approval Friday for the sale of substantially all its assets to an affiliate of Sun Capital Partners for $36.6 million.

Debtors' attorney Laura Davis Jones said the company and Point Blank Enterprises hope to close the sale as soon as Oct. 31.

Judge Peter J. Walsh also approved a settlement between the debtors and the U.S. Department of Justice during a hearing in the U.S. Bankruptcy Court for the District of Delaware.

Asset sale

Point Blank Enterprises, a company established specifically for the purchase of Point Blank Solutions assets, outbid stalking horse bidder Barrier Acquisition, LLC and two other bidders during an auction Oct. 27. The stalking horse bid was $20 million.

Davis told the court that Point Blank Enterprises' parent, Sun Capital, holds $8 billion in equity capital under management and requires no outside financing to complete this transaction.

The purchaser plans to continue to operate the debtors' business, which will emerge "much stronger financially," Davis said.

The debtor-in-possession lenders - Prescott Group Capital Management LLC, Privet Opportunity Fund I LLC and Lonestar Capital Management, LLC, as manager to PB Funding, LLC - asserted a claim for a breakup fee. Davis said the lenders' rights to pursue that claim are preserved in the asset purchase agreement.

DOJ settlement

The Department of Justice filed claims against debtors Point Blank Solutions, Point Blank Body Armor, Inc. and Protective Apparel Corp. of America. The claims were filed for damages and penalties under the False Claims Act and damages for breach of contract and other liabilities related to alleged false statements in connection with the sale of Zylon.

Jones said the government claims could have cost the estate "tens of millions of dollars." The settlement calls for a payment of $1 million.

The Department of Justice filed the complaint in October 2010, alleging that the company submitted false claims for payment and made false statements tied to the sale of defective Zylon body armor. The armor was sold to the United States and state, local and tribal law enforcement agencies funded in part by federal funds.

The $1 million payment to the government brings the release of the debtors from civil monetary claims.

Point Blank is a Pompano Beach, Fla., producer of body armor systems for law enforcement and the military. The company filed for bankruptcy on April 14, 2010. Its Chapter 11 case number is 10-11255.

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