Momentive Creditors Face Reckoning on Bankruptcy Plan
Momentive Performance Materials Inc. is set to face court rulings on its bankruptcy plan, including on a proposal to withhold some payments for unpaid interest that has senior lenders at odds with lower-ranked creditors.
U.S. Bankruptcy Judge Robert Drain in White Plains, New York, said he would render his decision on whether to confirm the plan and on related lawsuits today, after four days of sometimes contentious hearings last week.
The Waterford, New York-based maker of silicone and quartz products filed for bankruptcy protection in April after struggling to meet payments on debt dating to its $3.8 billion buyout by Leon Black’s Apollo Global Management LLC in 2006.
A decision by Drain to award the so-called make whole premiums to the creditors would reduce the payments available to lower-ranked creditors.
The judge must also decide whether unsecured noteholders are subordinated by contract to second-lien noteholders.
Under the pending plan — negotiated by the company, Apollo and an ad-hoc committee that represents second-lien debt holders — most of the stock goes to holders of $1.34 billion in 9 percent second-lien notes, while holders of $381.9 million in 11.5 percent senior subordinated notes due 2016 would get nothing.
The case is In re Momentive Performance Materials Inc., 14-bk-22503, U.S. Bankruptcy Court, Southern District of New York (White Plains).
Source: bloomberg
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