Opinion
Case No. 3:04CV0059.
March 30, 2006
ORDER
This matter is before the Court upon the Examiner's oral Motion to Amend the Bidding Order and following hearings held on March 29 and 30, 2006. During these hearings, the Court determined there were irregularities and confusion in bidding process set by the Order of March 10, 2006 (Doc. #397). Due to these irregularities, and in the best interests of the investors, see Dugger v. Cox, 32 F.Supp. 379, 381-82 (E.D. Tenn. 1940), aff'd, 116 F.2d 497 (6th Cir. 1940), the Court declines to accept any of the bids presented and bidding shall be reopened under the following procedures:
Bid Procedure
1. Participants. Each Bidder that presented a qualified bid shall be permitted to participate in the bidding process. The Court finds that Lorenzo Tonti, Ltd., All Settled Group, Inc. ("All Settled"), SPCP Group, L.L.C., ("Silver Point Capital"), and HBK Master Fund, L.P. ("HBK") presented qualified bids and are Qualified Bidders.
2. Bid Structures. Each Qualified Bidder shall be allowed to present both an all cash bid that provides a sum certain on the closing date (a "Cash/Close Bid") and a bid based on the structure proposed by Lorenzo Tonti, Ltd.
3. Bidding Increments. Cash/Close Bids shall be made in increments of $500,000. Tonti Structure bids shall be made in $500,000 net present value increments using an appropriate discount rate. The net present value of the Tonti Structure bid and any subsequent bids shall be determined by using the base case assumptions in the Lewis and Ellis projections and using the discount rate utilized.
4. Bid Process. The bidding shall be an open process. The Receiver shall make available to each Qualified Bidder the terms of any bid made by any Qualified Bidder. Each Qualified Bidder shall have the opportunity to increase its bid by an amount equal to at least the bid increment required by these Bid Procedures. The bid process shall begin on Thursday, March 30, 2006 at 2:05 p.m. eastern standard time and shall last until such time as no Qualified Bidder is prepared to increase its bid in an amount in excess of the relevant bid increment; provided however, that all such bidding must be completed by 5:00 p.m. on March 31, 2006, (the "Bid Conclusion"). Any questions regarding the Bid Process shall be directed to the Examiner. After the Bid Conclusion, the Receiver shall present to the Court for approval the highest and best Cash/Close Bid and the highest and best Tonti Structure Bid received by the Receiver as of the Bid Conclusion. The Court shall consider approval of the highest and best bid at a hearing to be held on April 11, 2006 at 9:30 a.m. and subject to a fairness hearing to be held on April 13, 2006 at 9:30 a.m.
5. Any Qualified Bidder may file a Memorandum explaining why its bid should be accepted provided that such Memorandum is filed on or before April 7, 2006.