WILMINGTON, Del. (Dow Jones) — Fedders Corp. on Wednesday won bankruptcy court approval to sell its U.S. residential heating, ventilating and air conditioning business to Elco Holdings Ltd. for $13.25 million.
Judge Kevin Shannon approved the sale at a hearing in the U.S. Bankruptcy Court in Wilmington, Del., where the troubled air conditioner maker filed for Chapter 11 protection in August 2007.
Liberty Corners, N.J.-based Fedders said if it didn't find a buyer for the U.S. HVAC business, it would have to shut it down due to liquidity issues. The U.S. business was operated under the Fedders North America Inc. and Emerson Quiet Kool Corp. names.
Fedders has been selling business units in an effort to raise money for creditors. Earlier, the court approved the sale of Fedders HVAC-Making unit for $14.4 million and the $7.5 million sale of a Long Island operation, Fedders Islandaire Inc.
Creditors have predicted asset sales will fall far short of what the company needs to pay off its debts. In early Chapter 11 documents, Fedders reported it owed $68 million in secured debt, $155 million in bond debt and $53.6 million in trade debt.
