Auction set for Gainey Corporation

GRAND RAPIDS, Mich. (WOOD) - One year to the day the Gainey Corporation filed for bankruptcy, Judge James Gregg commended all the parties involved for the progress they've made.

But there's still no resolution.

As Gregg said in court, "We're at the point where things need to be done. No foot dragging."

The court procedure Wednesday centered on the bidding process to buy the company.

Interested parties must qualify to participate in an auction, and must deliver a written offer no later than November 2.

An auction is scheduled for November 16 at the Dickinson Wright Law Firm, then the judge will decide whether to approve the sale the next day.

The corporation's October 2008 bankruptcy filing came after the lenders, led by Wachovia Bank, sued the trucking giant in September 2008, arguing they were owed more than $200 million.

24 Hour News 8 learned weeks ago in federal bankruptcy court that a final buyer could be identified in a hearing on Wednesday, but the actual sale could be pushed to November.

In late August, the judge said he could not sign off on a $105 million sale to private equity firm Najafi Companies proposed at the time. Gregg said it amounted to a "'Monopoly' free pass" for company insiders, including founder Harvey Gainey and Carl Oosterhouse, its chief operating officer.

In September, the parties in the case -- Gainey Corporation, its lenders and its unsecured creditors -- were on board with a new plan to move a sale forward, one they said addressed the judge's concerns about insider benefits.