Russell-Stanley plan of reorganization confirmed

New York, Oct. 25 - Russell-Stanley Holdings, Inc.'s plan of reorganization was confirmed by the U.S. Bankruptcy Court for the District of Delaware in an order dated Monday and filed Tuesday.

The plan is expected to become effective and the sale of the company to an affiliate of Mauser-Werke GmbH & Co. KG and One Equity Partners is expected to closed within 10 days.

Confirmation comes just more than two months after the company made a prepackaged Chapter 11 filing on Aug. 19.

Under the plan of reorganization:

* Secured bank claims totaling $75.976 million will be paid in full in cash for a 100% recovery;

* General unsecured claims totaling $18 million will be paid in full in cash for a 100% recovery;

* Senior subordinated note claims totaling $27.4 million will receive the remaining sale proceeds in cash for an estimated 70% to 90% recovery excluding paid-in-kind interest or 51% to 66% recovery including paid-in-kind interest;

* Equity interests will be cancelled and receive nothing.

As of May 31, Russell-Stanley had $76 million of secured debt outstanding under its credit facility and $27.4 million of 9% senior subordinated notes due 2008.

Ahead of the filing, holders of the senior subordinated notes voted on the plan. Investors owning 87% of the notes cast ballots, all of them in favor of the plan.

At the time the filing was made, the company said it had "unanimous" creditor support and was using the bankruptcy process to implement the sale of the company to an affiliate of Mauser-Werke and One Equity Partners. Mauser will pay $96.415 million in cash for the company.

Russell-Stanley added that the filing was a condition of the sale and not made because of "operational concerns" - although court documents disclose it is in default on its bank debt.

Russell-Stanley had been trying to sell itself since 2002, according to court documents.

Russell-Stanley is a Bridgewater, N.J., maker of plastic drums and steel drums and an industrial container supply chain management company. Its Chapter 11 case number is 05-12339.

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