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Former Velocity Express demands payment under sale, wind-down orders
By Caroline Salls
Pittsburgh, June 23 - VEC Liquidating Corp. and its official committee of unsecured creditors asked the U.S. Bankruptcy Court for the District of Delaware to force ComVest Investment Partners and Velocity Acquisition I, LLC to comply with a sale settlement and amended wind-down order, according to Wednesday court filings.
The company and committee also asked the court to impose sanctions against ComVest and Velocity Acquisition for contempt and order them to pay the expenses, interest and attorneys fees related to prosecution of the compliance motions.
VEC Liquidating and the committee said they filed the motion to enforce the sale settlement order to force the ComVest entities to turn over 35% of the free cash flow of the company's Canadian business, which totaled $655,259 through the fourth quarter of 2010.
According to the motion, the ComVest entities' refusal to comply with the sale settlement order and turn over the free cash has delayed the administration of VEC Liquidating's Chapter 11 case and "effectively wasted the precious few funds available to pay the wind down professional."
In addition, VEC Liquidating and the committee said ComVest was required to pay four installments of $19,000 per month required for the company's wind down professional to do his job.
However, the ComVest entities "have blatantly ignored the court order and paid nothing at all."
Hearings on both motions are scheduled for July 8.
VEC Liquidating was formerly Velocity Express Corp., a regional delivery services provider based in Westport, Conn. The company filed for bankruptcy on Sept. 24, 2009. Its Chapter 11 case number is 09-13294.
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