Intermet asks court to approve agreement outlining Chapter 11 plan

By Jennifer Lanning Drey

Portland, Ore., May 18 - Intermet Corp. requested court approval of an agreement with its official committee of unsecured creditors and other major constituencies that will form the basis of its Chapter 11 plan, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

The agreement resolves pending claims asserted by the company's creditors committee against Intermet's pre-bankruptcy lenders and outlines a structured distribution scheme, according to the filing.

Under the agreement, holders of claims under the first-lien term and second-lien loan documents will vote to accept the Chapter 11 plan.

In addition, the secured lenders will agree to Intermet's continued use of cash collateral through July 31.

Intermet will pay the first-lien agent for the benefit of the first-lien lenders $20 million upon bankruptcy court approval of the settlement motion.

The secured lenders have agreed to a modification of the cash collateral order providing for an increase of the $125,000 limitation on fees and expenses of the creditors committee's professionals in connection with investigating causes of action against any pre-bankruptcy secured party by $53,000.

The holders of the first-lien term loan will enter into an asset purchase agreement providing for the purchase of substantially all of Intermet's assets using a credit bid of their secured claims.

Alternatively, the holders of the first-lien term loan will consent to a sale of substantially all of Intermet's assets to a third party that submits a bid containing a minimum cash price of $23 million.

Also under the agreement, the first-lien term loan claims will be allowed in an amount of $58 million, and second-lien term loan claims will be allowed in an amount of $97.5 million.

A lender liquidating trust will be established.

A hearing has been scheduled for May 27.

Intermet, a Fort Worth, Texas-based automotive cast component supplier, filed for bankruptcy on Aug. 12, 2008. Its Chapter 11 case number is 08-11859.

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