Insilco term C lenders withdraw motion

By Jeff Pines

Washington, July 27 - Insilco Technologies Inc.'s term C lenders withdrew their motion to dismiss the unsecured creditors' committee's objection so they would get their distribution.

No reason was given for the withdrawal, which was filed Monday with the U.S. Bankruptcy Court for the District of Delaware.

On Friday, the lenders asked the court to dismiss the committee's objection.

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.

The lenders said the committee's objection was filed in violation of the reorganization plan and added that the settlement agreement is final. They wanted the objection dismissed.

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

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