Former Indalex's trustee wants court to OK settlement with U.S. Bank

By Lisa Kerner

Charlotte, N.C., April 4 - IH 1, Inc.'s Chapter 7 trustee George L. Miller asked the court for an order approving a proceeds agreement between the former Indalex Finance Corp. and U.S. Bank, NA, indenture trustee for the holders of the company's 11½% second-priority senior notes due 2014, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

A hearing is set for May 26.

Under the proposed agreement, the trustee will not object to the allowance of U.S. Bank's claim of about $213 million, the filing said.

In addition, U.S. Bank will receive proceeds from the "Sun Action" as follows: 50% of the first $10 million in net proceeds, if any; 40% of the next $10 million in net proceeds, if any; and 30% of any net proceeds thereafter.

Sun Indalex Finance LLC asserted a secured claim against the debtors in the principal amount of about $34.6 million, while Sun Indalex LLC asserted a secured claim of about $62.45 million.

In July, the trustee filed an adversary complaint against Sun Capital Partners, Sun Indalex, Sun Indalex Finance and certain other parties (the "Sun Action").

As previously reported, the company sold substantially all of its assets before the case was converted to Chapter 7 from Chapter 11, and the sale proceeds were not enough for Indalex to make a distribution to the noteholders.

Indalex, a Chicago-based aluminum extruder and producer of soft alloy extrusion products, filed for bankruptcy on March 20, 2009. Its Chapter 11 case number is 09-10982.

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