Aug 25 A judge on Monday delayed a ruling on
whether to confirm a plan by Momentive Performance Materials, a
quartz and silicone maker owned by Apollo Global Management, to
cut $3 billion in debt and exit bankruptcy.
Judge Robert Drain, who had been expected to read his ruling
from the bench on Monday, told parties in his White Plains, New
York, courtroom that he would hold off until Tuesday as the
company tries to resolve certain objections to its plan.
It was the second time Drain has postponed the ruling, which
was initially expected last week.
Waterford, New York-based Momentive filed for Chapter 11
bankruptcy in April with an agreement to transfer control to a
class of bondholders who would participate in a $600 million
The key objection comes from more junior bondholders, led by
U.S. Bank NA as trustee, who would recover nothing under the
plan. Owed some $382 million, the group cannot be treated worse
than the bondholders participating in the rights offering, U.S.
Momentive has cited contract language pushing the U.S. Bank
group's debt behind other creditors', but the bank claims the
clause applies only to senior secured lenders, and that no other
creditor group can stand ahead of it in the payback line.
Parties have acknowledged that a win for U.S. Bank on the
issue would upend the restructuring and send Momentive back to
the drawing board.
Drain's decision to delay his ruling was related to a
separate objection from a group of secured lenders owed about $1
billion, who claimed they were entitled to extra premiums in
exchange for early redemption of their bonds.
The lenders on Monday signaled a willingness to withdraw
their objections, sparking Drain to give the parties another day
to try to work out a resolution. He is now expected to rule on
(Reporting by Nick Brown; Editing by Leslie Adler)