NEW YORK, Sept 19 (Reuters) - Tupperware's lenders

opposed the food storage and kitchen products company's proposed

bankruptcy auction during the company's first court appearance,

cutting off its access to cash and threatening to derail the

company's bankruptcy plans.

The Orlando, Florida-based company filed for bankruptcy

protection late Tuesday, with $818 million in debt and a plan to

find a buyer within 30 days.

But three key lenders, Alden Global Capital, Stonehill

Institutional Partners and a trading desk of Bank of America ( BAC ),

which bought Tupperware debt with a face value of $450 million

in July, quickly opposed the company's plans.

They took the rare steps of cutting off its access to $7.4

million in its bank accounts and filing a motion to dismiss the

bankruptcy or convert it to a Chapter 7 liquidation that would

allow lenders to quickly seize the company without the time and

expense of a lengthy Chapter 11 bankruptcy.

The lenders' attorney, Allan Brilliant of Dechert, said at a

court hearing in Wilmington, Delaware, that the company's

bankruptcy strategy would simply drag out the company's failed

search for a buyer.

Tupperware has spent $67 million since January 2023 on

restructuring and marketing professionals, but the highest bid

was just 20% of the company's existing $818 million in debt,

according to the lenders' court filings.

"They hope to convince Your Honor that they could sell to

some third party rather than the lenders, but the reality is

that that's just not going to happen here," Brilliant told U.S.

Bankruptcy Judge Brendan Shannon, who is overseeing the case.

Tupperware resisted the lenders' attempt to quickly

foreclose on its assets after that purchase, instead believing

that it should be allowed to conduct an open and transparent

sale of its assets in a court-supervised bankruptcy proceeding,

according to the company's attorney, Spencer Winters of Kirkland

& Ellis.

Winters pointed out that the objecting lenders had only

recently acquired a controlling stake in the company's debt for

between $15 million and $30 million. That investment is far less

than the bids that the lenders now portray as unrealistically

low.

Brilliant said that the amount his clients paid for the debt

was irrelevant.

Tupperware intends to ask Shannon to restore its access to

cash accounts at a court hearing next week.

Tupperware attributed its bankruptcy to a years-long slump

in sales, saying it relied too heavily on independent sales

representatives instead of selling online or in retail stores.

The case is In Re Tupperware Brands Corp, U.S. Bankruptcy

Court for the District of Delaware, No. 24-12156.

For Tupperware: Spencer Winters of Kirkland & Ellis

For the ad hoc group of lenders: Allan Brilliant of Dechert

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