Knotel’s Unsecured Creditors Object to Company’s Bankruptcy Sale

Knotel Inc.’s unsecured creditors say the once high-flying office space provider shouldn’t be sold to a Newmark Group Inc. affiliate because higher bids can be found.

Digiatech’s $70 million stalking horse credit bid, which sets a minimum price for the sale process, is a “loan-to-own gambit” that will discourage potential bids from other parties, according to an objection filed Monday by the official committee of unsecured creditors.

The 28-day sale process, and the fact that Moelis & Co. didn’t begin the marketing process until after Knotel filed for bankruptcy, will suppress interest in the auction, Alan Tantleff, a ...