A federal bankruptcy judge issued an order today giving Building Materials Holding Corp. (BMHC), the nation's sixth-biggest LBM dealer, a three-month extension of its exclusive rights to offer a reorganization plan and solicit approval for that plan to exit from Chapter 11 bankruptcy-law protection.
U.S. Bankruptcy Judge Kevin Carey's action, taken at a hearing in Wilmington, Del., means that BMHC now has exclusive rights through Jan. 12 to propose a reorganization plan and through March 15 to solicit acceptances of that plan.
Companies that seek Chapter 11 protection from creditors enjoy, for the first 120 days after entering bankruptcy, the exclusive right to file a reorganization plan. They also get exclusive rights during the first 180 days after filing to solicit approval for that plan. After that, other groups--typically creditors and would-be owners--can file their own proposals. In BMHC's case, given that it filed for Chapter 11 on June 16, its exclusive period for filing a reorganization plan ended Oct. 14 and its exclusive right to solicit would have ended on Dec. 14.
BMHC's request, filed Oct. 12, stressed that the Boise, Idaho-based company still plans to emerge from under the Chapter 11 umbrella by year-end. "Nonetheless, the Debtors are filing this motion out of an abundance of caution because they believe that potential issues caused by competing plans at this stage would distract management and would not be productive," the company's request said. "Thus, preserving the Exclusive Periods is in the best interests of the Debtors and their estates."
BMHC was the No. 6 dealer on this year's ProSales 100, with total sales in 2008 of $1.3 billion. But in the 12-month period ended Aug. 31, BMHC's revenue had shrunk to $842 million, its assets were worth $406 million and its liabilities totaled $459 million.