Plastech term lenders, major customers agree to fund wind-down

By Caroline Salls

Pittsburgh, June 3 - Plastech Engineered Products, Inc. requested court approval of a series of settlements under which the company's first-lien term loan lenders and major customers have agreed to fund Plastech's wind-down expenses, according to a Monday filing with the U.S. Bankruptcy Court for the Eastern District of Michigan.

Plastech's major customers include General Motors Corp., Ford Motor Co., Chrysler, LLC and Johnson Controls, Inc. Goldman Sachs Credit Partners, LP is the lead arranger, syndication agent, administrative agent and collateral agent for the term loan lenders.

Specifically, the term lenders have agreed to make a $14 million lump sum contribution in cash from the proceeds of the sale of Plastech's interiors business for the exclusive benefit of the company's general unsecured creditors.

Also under the wind-down settlement, up to $17 million in section 503(b)(9) administrative expense claims will be funded, with the customers expected to fund up to $8.5 million by making additional debtor-in-possession loans available and the term lenders to arrange up to $8.5 million in funding from the proceeds of the interiors business acquisition.

The customers have also agreed to waive any deficiency claims arising from the DIP loans and pre-bankruptcy revolving credit loans that may arise after liquidating the collateral that secures their loans.

In addition, Chrysler, Goldman Sachs, the term lenders and the company have reached a settlement that resolves disputes related to Chrysler's alleged termination of a Plastech production contract, and the company and the lenders have reached a settlement that allows the lenders' claims and validates their liens against collateral, according to the motion.

Each settlement is contingent on the approval of the other settlements.

Plastech, a Dearborn, Mich.-based auto parts supplier, filed for bankruptcy on Feb. 1. Its Chapter 11 case number is 08-42417.

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