Lexington Precision seeks court approval for continued use of cash collateral

By Rebecca Melvin

New York, Feb. 2 - Lexington Precision Corp. requested continued use of cash collateral through the end of 2009 to complete its connector seals business consolidation, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of New York.

When Lexington originally filed for Chapter 11 bankruptcy protection in April, it anticipated a "relatively brief stay" in chapter 11 to de-leverage the company's balance sheet without the need for operational restructuring, but due to severe economic conditions and the collapse of sales of the North American automobile OEM sector, operational restructuring of the connector seals business is considered necessary, the company said in documents filed with the court.

Among parties with interest in cash collateral are CapitalSource Finance LLC and Webster Business Credit Corp.

Lexington will use the cash collateral for working capital and capital expenditures and other general corporate purposes.

The company will continue to make adequate protection payments in amounts equal to interest payments and principal payments due under the prepetition senior lender loan documents.

A hearing on the motion will be held Feb. 23

The company was initially granted approval to use cash collateral and obtain $4 million in debtor-in-possession financing on April 17, 2008.

The company has also sought to extend its exclusive plan-filing period to April 27 from Jan. 26 and the solicitation period to June 25, 2009 from Feb. 25.

Lexington Precision, a New York-based manufacturer of rubber and metal components for the automobile and medical devices industries, filed for bankruptcy on April 2, 2008. Its Chapter 11 case number is 08-11153.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.