Lexington Precision creditors committee files reorganization plan

By Caroline Salls

Pittsburgh, Sept. 14 - Lexington Precision Corp.'s official committee of unsecured creditors filed a plan of reorganization and related disclosure statement for the company's bankruptcy case, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Treatment of creditors will include:

• Holders of other priority claims, other secured claims, convenience claims and secured tax claims will be paid in full in cash;

• CapitalSource secured claims and CSE secured claims will be paid in full through the issuance of new secured notes;

• Holders of senior subordinated note claims will receive 65% of the new common stock in the reorganized company;

• Holders of junior subordinated note claims, series B preferred stock interests, common stock interests and other equity interests will receive no distribution;

• Holders of general unsecured claims will be paid in full through the issuance of new unsecured notes; and

• The distributions to holders of asbestos-related claims will be limited to insurance proceeds.

The committee said the plan distributions will be funded through an exit financing arrangement with holders of the company's senior secured note claims and debtor-in-possession facility claims under which the reorganized company will issue third-lien notes in an amount equal to $10 million plus the amount of DIP loan claims.

The reorganized company will also issue 35% of its new common stock and a $1.5 million exit financing note to the exit financing parties.

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.

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