Insilco term loan C lenders ask court to toss out creditors' objection

By Jeff Pines

Washington, July 26 - Insilco Technologies Inc.'s term loan C lenders want the U.S. Bankruptcy Court for the District of Delaware to toss out the objection from the official committee of unsecured creditors.

They filed their request on Friday.

The lenders include DLJ Merchant Banking Partners II and other DLJ partnerships.

Under a settlement agreement, the lenders were given an allowed claim of $254.93 million.

The company's reorganization plan was approved June 10 but the day before the committee objected wanting to reclassify or subordinate the claim, the lenders said. The committee said the term loan violated the 12% senior subordinated note indenture and worsened the company's insolvency. The reorganization plan called for noteholders to get pennies on the dollar and the senior lenders to get an estimated 25% recovery.

DLJ Merchant Banking Partners II also owned an equity stake in Insilco.

The lenders said the committee's objection was filed in violation of the reorganization plan, that the settlement agreement is final and they want the objection dismissed.

A Sept. 23 hearing is scheduled.

Insilco filed for bankruptcy on Dec. 12, 2002. The company's Chapter 11 case number is 02-13672.

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