Allied Systems Holdings wants case moved from Delaware to Georgia

By Jim Witters

Wilmington, Del., May 21 - Allied Systems Holdings, Inc. and its affiliate Allied Systems, Ltd. are seeking a change of venue for their involuntary Chapter 11 bankruptcy case to the Northern District of Georgia, according to documents filed May 21 with the U.S. Bankruptcy Court for the District of Delaware.

"Alleged debtor Allied Holdings, a Delaware corporation, itself does not engage in business operations. Instead, Allied's major line of business is carried out by Georgia corporation Allied Automotive Group, Inc. and its direct and indirect subsidiaries," Allied states in its motion.

The company has no employees in Delaware and "does not own any real estate or other tangible assets located in Delaware and has no creditors doing business with it from Delaware," the motion states.

Allied's previous Chapter 11 bankruptcy was filed in the Northern District of Georgia in 2005 and confirmed in that court in 2007, Allied's motion states.

"Under the totality of circumstances, the convenience of the parties and the interest of justice warrant the prompt transfer of venue of these cases to the Georgia Bankruptcy Court," the Allied motion states.

No hearing has been scheduled on the motion.

Battle for control

As previously reported, three lenders holding at least $52.8 million in claims against Allied filed an involuntary Chapter 11 proceeding against the company on May 18.

The lenders - BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP and Black Diamond CLO 2005-1 Ltd. - claimed Allied Systems defaulted on $315 million in credit agreements obtained when it emerged from Chapter 11 bankruptcy in 2007 under the control of Yucaipa American Alliance Fund I, LP and Yucaipa American Alliance Parallel Fund I, LP.

In its motion for a change of venue, Allied claims its goals in the earlier bankruptcy proceeding "were largely achieved" with the help of Yucaipa American Alliance Fund I, LP and Yucaipa Alliance.

But the petitioning lenders said Yucaipa tried to hijack "control of the first-lien credit agreement" and control the administrative agent.

The petitioning creditors have asked the court to appoint a Chapter 11 trustee to oversee the case in light of the "ongoing, pervasive manipulation and control of the alleged debtors by Yucaipa and the significant conflicts of interest that leave the alleged debtors incapable of fulfilling their fiduciary obligations."

The involuntary bankruptcy case against Allied, a Decatur, Ga.-based distributor of new and used vehicles, was filed May 18. The Chapter 11 case number is 12-11564.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.