Metalforming Technologies' liquidation plan confirmed

By Caroline Salls

Pittsburgh, April 13 - Metalforming Technologies, Inc.'s plan of liquidation was confirmed Thursday by the U.S. Bankruptcy Court for the District of Delaware.

Under the plan, general unsecured creditors will recover their share of a $4 million-plus general unsecured fund.

Under the plan, proceeds remaining from the sale of substantially all of the company's assets and proceeds from the sale of any remaining non-cash assets will be distributed to claimholders.

A chief liquidating officer will be appointed to consummate the plan and close Metalforming's Chapter 11 case.

According to the disclosure statement, the general unsecured claim fund includes $4 million deposited after the sale of the company's assets, the net proceeds of any litigation claim recoveries and any amount placed in the fund after distribution of lender claims.

Treatment of creditors under the plan will include:

• Holders of administrative expense claims, priority tax claims and priority claims will receive 100% recovery in cash;

• Holders of $52.01 million in lender claims will receive all amounts remaining in a pre-bankruptcy lender account up to 70% of their claims. The 70% takes into account an interim lender distribution made following the asset sale.

After lender claimants have recovered 70% of their claims, 85% of the remaining balance in the lender account will be distributed to the agent for the benefit of the pre-bankruptcy lenders and 15% will be distributed to the general unsecured claim fund to be distributed to holders of general unsecured claims;

• Holders of general secured claims will receive a recovery amount between the value of the property being secured and 100% of their claims in either the collateral securing the claims or cash equal to the value of the collateral securing the claims;

• Holders of general unsecured claims will receive their share of cash from the general unsecured claim fund; and

• Holders of equity interests will receive no distribution under the plan.

Metalforming, a Chicago-based automobile parts manufacturer, filed for bankruptcy on June 16, 2005. Its Chapter 11 case number is 05-11697.

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