Clark Material Handling Company's buyout deal with investment firm Sun Capital Partners Inc has collapsed, and most of its assets will be auctioned tomorrow (January 24).

Clark MHC had signed a reported USD40 million sale agreement with Sun Capital, of Boca Raton, Florida, on December 18, but the deal unravelled on December 23 when Sun Capital withdrew its offer.

Sun Capital could not be contacted for comment.

Clark then moved rapidly to identify another buyer, according to Clark MHC chief executive Kevin Reardon. "We have several very interested groups," he said this week.

Bidding procedures for the January 24 auction required interest notices to be filed by January 22, according to court papers. Bidders were required to deposit 10 percent of their intended bid in cash or via a letter of credit.

The auction is at 10am (USA EST) in the Wilmington office of lawyers Klett Rooney Lieber & Schorling, which represents Clark. Court papers indicated the intent was to obtain sale approval from the US Bankruptcy Court on January 27.

"Following the entry of an order approving the sale, the debtors and the successful bidder shall close the contemplated transaction by not later than January 31, 2003," court papers said.

Clark filed for protection from creditors under Chapter 11 of the US Bankruptcy Code in April 2000, listing USD349 million in assets and USD374 million in debts.

While Clark's financial situation was unchanged after Sun Capital's withdrawal, the company's debtors moved, according to court papers, "to expeditiously liquidate assets ... in an orderly fashion so the highest value ... may be realised''. An earlier auction, planned for January 9, did not eventuate.

Court papers indicated Clark marketed its assets for more than two years to more than 100 entities to find a buyer. Clark's most recent cash flow report, required under the US Bankruptcy code, showed that, in November, Clark had receipts of USD2.79 million, disbursements of USD2.935 million, and a negative cash flow of USD145,212.