Anchor Glass creditors committee objects to note-funded DIP

By Caroline Salls

Pittsburgh, Sept. 6 - Anchor Glass Container Corp.'s official committee of unsecured creditors objected to the company's debtor-in-possession financing from Wells Fargo Bank, NA, saying the company is allowing note buyers to control it through the DIP agreement.

In a Friday filing with the U.S. Bankruptcy Court for the Middle District of Florida, the committee said it did not have a chance to review or determine the validity of the notes that comprise part of the Wells Fargo financing agreement.

According to the objection, the notes are not part of the bankruptcy case and are not attached to the term sheet for the financing agreement.

The committee also objected to Anchor's ability to amend the financing agreement without providing the committee with proper notice and the chance to object.

Also, the committee said the type of extraordinary relief provided to Wells Fargo and the noteholders, who are insiders and current creditors of the company, coupled with the extraordinary concessions and covenants contained in the term sheet "lead to the unmistakable conclusion" that the note purchasers are attempting to inappropriately control the bankruptcy case through the financing agreement.

Anchor Glass, a Tampa, Fla., manufacturer of glass containers, filed for bankruptcy on Aug. 8. Its Chapter 11 case number is 05-15606.

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