Former Indalex’s trustee requests approval of Sun Capital settlement

By Caroline Salls

Pittsburgh, Oct. 25 – The Chapter 7 trustee for IH 1, Inc., formerly Indalex Holdings Finance, Inc., requested court approval of a settlement reached with Sun Capital Partners, Inc. and numerous co-defendants, according to a motion filed Monday with the U.S. Bankruptcy Court for the District of Delaware.

Trustee George L. Miller said he filed a lawsuit against the defendants on July 30, 2010. In addition to approval of the settlement, the trustee said he is also seeking approval to assign the defendants’ 11½% second-priority senior secured notes, which were issued by Indalex Holding Corp., without further action.

Under the proposed settlement, all of the defendants’ security interests in and liens on the IH 1 debtor estates’ assets and property, including $16.24 million in cash held by the trustee and cash that may be acquired, will be deemed invalid and avoided.

The security interests and Sun liens will be preserved exclusively for the benefit of the IH 1 debtors’ estates.

All bonds held by or for the benefit of any defendant will be assigned to the trustee.

In addition, the trustee will receive a $5.3 million payment under the settlement.

A hearing is scheduled for Nov. 14.

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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