Judge Approves Bankruptcy Sale of Red River Waste to Platform Capital
Red River Waste Solutions can officially proceed with its sale to a division of Colorado-based private equity firm Platform Capital, after approval by a federal bankruptcy judge on Friday.
Definitive agreements are still being worked out with some creditors as part of a protracted bankruptcy process, but the majority of issues have been resolved and Platform Waste Solutions is on track to buy the Texas-based carrier for a amount estimated at $12.6 million. In a hearing on Friday, a lawyer for Platform said the deal could potentially close by the end of July.
At least one other unspecified buyer expressed interest in acquiring some of Red River’s assets, and many other potential buyers were contacted, but the private equity firm had the most viable offer.
“Platform Waste Solutions emerged as the bidder with the highest and best bid on an aggregate basis for the subject assets,” said Judge Edward Morris of the United States Bankruptcy Court, Northern District of Texas. While “arguably, under the bidding procedures, there could have been a notional auction”, because the bids were submitted by certain creditors, none of these parties would have outbid the Platform offer.
Red River – which filed for bankruptcy last October, citing the effects of the pandemic – has struggled to maintain service for several high profile residential contracts in recent months and has fallen behind in servicing its fleet. As a result, Fort Wayne, Indiana recently switched to GFL Environmental.
In Tennessee, the Nashville Metropolitan Government and Davidson County ended up temporarily suspending recycling service and also bringing in emergency contractors to help catch up. As part of the proposed sell orderRed River will continue to provide feeder service to Nashville at its current rates through the end of August and will negotiate a new contract in the future.
Platform’s US waste portfolio currently includes two smaller Illinois carriers. During the hearing, representatives said the company has visited the majority of Red River’s operating sites, spoken with customers, and has an operating plan moving forward. The platform declined to comment until the sale closed.