Unsecured Creditors Try To Halt Exide Plan
The Official Committee of Unsecured Creditors to Exide Technologies has filed a motion to stay the proceedings on the company's plan of reorganization and disclosure statement. But levels for the loan only softened to the 59-611/3 context, according to LoanX. Mid July, the levels had risen to the 63-64 range following the filing of the company's plan of reorganization (LMW, 7/21). The bulk of the equity of a reorganized Exide is slated to go to bank debt holders.
The motion also seeks an order of the court to re-schedule the disclosure statement hearings to a date no sooner than Dec. 31 and to terminate Exide's exclusive period to file and seek acceptances of a plan of reorganization. The unsecured creditors committee is still challenging the "amount, status and nature of the pre-petition banks' claims," according to court documents. While the current plan of reorganization makes an effort to provide a settlement to that litigation, the unsecured creditors do not agree.
"Despite the pending litigation, the debtors' proposed plan transfers virtually all of the value of the debtors' businesses to the pre-petition banks, leaving practically nothing for the more than $1 billion of claims held by the debtors' diverse unsecured creditors," the committee for the unsecured creditors claims in their bankruptcy filing. Matthew Kleiman, a partner at Kirkland & Ellis and an attorney for Exide, conceded that a global solution has not yet been reached. He said Exide needed to move forward with a plan. But he noted the company is in the beginning of the process of moving toward a final confirmed plan and said negotiations continue. There is a hearing set for Aug 19.