July 28 (Reuters) - Unsecured creditors of bankrupt beauty salon chain Trade Secret have objected to the proposed sale of the company to an entity backed by Regis Corp (RGS.N).
The official committee of unsecured creditors includes Procter & Gamble Co (PG.N), Simon Property Group Inc (SPG.N) and General Growth Properties Inc (GGP.N), among others.
In court papers filed on Tuesday, the committee said the proposed sale procedures did not promote a competitive process and released potential causes of action against Trade Secret's management and Regis.
The committee said allowing Regis to credit bid $32 million would "chill" the bidding and give Regis an unfair leverage.
"The deadlines proposed by the debtors (Trade Secret) must be extended so that parties other than Regis and the Luborsky family have an opportunity to benefit," they added.
Trade Secret filed for bankruptcy earlier this month and agreed to transfer its 612 salons to a Regis venture that will pay $45 million for the assets.
Regis would then transfer its interest to a new entity affiliated with Trade Secret Chief Executive Brian Luborsky, which would then operate a scaled-down Trade Secret.
Based in Markham, Ontario, Trade Secret operates salons under the Trade Secret, Beauty Express, BeautyFirst and PureBeauty brands.
The case is In re: Trade Secret Inc, U.S. Bankruptcy Court, District of Delaware, No. 10-12153. (Reporting by Santosh Nadgir in Bangalore; Editing by Prem Udayabhanu)