Indalex trustee says settlement OK means up to $4 million to estate

By Jim Witters

Wilmington, Del., Sept. 19 - The Chapter 7 trustee for the former Indalex Finance Corp. - now IH 1, Inc. - is seeking approval of a settlement with Sun Indalex Finance, LLC and certain Canadian retirement plans and former executives that could bring $3.5 million to $4 million to the debtor's estate, according to a Sept. 19 filing with the U.S. Bankruptcy Court for the District of Delaware.

The trustee has asserted claims in the Ontario, Canada, proceedings of Indalex Ltd., Indalex Holdings (B.C.) Ltd., 6326765 Canada Inc. and Novar, Inc. (collectively, the Canadian debtors) under the Companies' Creditors Arrangement Act.

Other parties, including Sun Indalex Finance, LLC, Morneau Shepell Ltd., as administrator of the retirement plan for executive employees of Indalex Ltd. and associated companies and the retirement plan for salaried employees of Indalex Ltd. and related companies, United Steelworkers and the group of 14 members of the executive plan represented by Koskie Minsky LLP, have also asserted claims to the funds held in the Canadian proceedings.

The monitor in the Canadian proceedings holds about $5 million, the filing states.

Proposed settlement

Under the terms of the agreement:

• Koskie Minsky will receive $350,000 in trust for the retired executives;

• Koskie Minsky will receive $285,000 in trust as partial reimbursement of the legal costs of the retired executives;

• Each of the four members of the executive plan who is not a retired executive will receive $15,000 in equal payments of $3,750;

• Morneau will receive $650,000 on behalf of and for deposit to the salaried plan;

• The USW will receive $105,000 on behalf of the seven members of the salaried plan that the union represents; and

• The remainder of the funds held by the monitor will be paid to the trustee.

Unsettled disputes

The agreement does not resolve or release the trustee's claims against Sun and its affiliates.

Sun has asserted a secured claim against the debtors in the principal amount of $34.6 million.

Sun Indalex LLC has asserted a secured claim against the debtors in the principal amount of $62.45 million, based on Sun Indalex's purchase of a portion of certain senior notes.

On July 30, 2010, the trustee filed an adversary complaint against Sun, Sun Indalex and other related parties.

A hearing on the proposed settlement of the Canadian actions is scheduled for 2 p.m. ET on Oct. 10.

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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