WILMINGTON, DEL. (CN) – Georgia Gulf Co. claims Sandelman Partners, a New York-based hedge fund, is demanding in bad faith that it accelerate payments on $44 million in debt, by falsely claiming that Georgia Gulf exceeded its debt capacity. Georgia Gulf, which has $1.2 billion in debt on its books, claims the wrongful demand could cause a cascading series of harm, including bankruptcy.
The complaint states: “In today’s troubled economic times, especially in light of the ‘credit crunch,’ business failures and the concern that the slowdown in the national economy has caused, news of a default, and particularly an acceleration of debt, travels almost instantaneously through industry publications and the financial press. Such publicity will likely cause suppliers to cease providing credit or to require new, onerous credit terms, customers to be concerned about business viability, and lenders to stop advancing credit or to require concessions from the Company. This may all occur even though no actual default exists. These are the consequences Georgia Gulf believes Sandelman is relying upon in the execution of its illegitimate strategy.”
Plaintiff seeks declaratory judgment that it is not in default, and an injunction. Its lead counsel in Chancery Court is Michael Pittenger with Potter Anderson & Corroon.