Red River Waste failing to run a marketing process, lender says

By Sarah Lizee

Olympia, Wash., March 22 – Red River Waste Solutions, LP’s new bid procedures for its assets and a proposed stalking horse agreement drew an objection on Monday from lender and administrative agent MUFG Union Bank, NA, according to a filing with the U.S. Bankruptcy Court for the Northern District of Texas.

On Thursday, the company filed the new bid procedures and a stalking horse notice, designating Platform Capital, LLC as stalking horse bidder.

MUFG said Monday that to date, the debtor has done little to market the assets and has only engaged in inbound interest.

“This is not a value-maximizing process,” the lender said in its objection. “Instead, this is a commitment to inaction that contains all the indicia of a private sale that actively discourages competitive bidding. Indeed, the debtor’s failure to run a marketing process harms all parties in interest and should not be rewarded.”

MUFG said the debtor should be required to run a transparent process with input from its largest creditors.

“Any order approving bidding procedures must require the debtor to run a professional, value-maximizing, organized marketing and auction process,” the lender said.

“Anything less will result in an irrevocable loss to the estate and all of the debtor’s creditors.”

As previously reported, the purchase price under the stalking horse agreement is $13.32 million.

Bid protections under the stalking horse agreement include a $390,000 breakup fee and a $250,000 expense reimbursement.

The minimum overbid increment has been set at $75,000.

The revised bid procedures reflect a new sale timeline, including a bid deadline of 6 p.m. ET on May 5, a May 12 auction, if needed, and a May 25 sale hearing.

The Dripping Springs, Tex.-based waste management company filed bankruptcy on Oct. 14 under Chapter 11 case number 21-42423.

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