Momentive, indenture trustees ink stipulation tied to payment motion

By Caroline Salls

Pittsburgh, Oct. 23 – Momentive Performance Materials Inc. entered into a stipulation related to first-lien and 1˝-lien note trustees’ motion asking the U.S. Bankruptcy Court for the Southern District of New York to compel the company to comply with its final debtor-in-possession order related to adequate protection payments, according to a Thursday court filing.

Specifically, under the stipulation, if Momentive’s plan of reorganization takes effect on or before Oct. 31, any unpaid interest on the notes accruing from Oct. 15 to the effective date will be paid in cash on the effective date.

If the plan takes effect after Oct. 31, the rights of all parties will be fully reserved in connection with the issues set in the motion to compel.

Under a previous stipulation, the effective date deadline in connection with the payment was Oct. 15.

As previously reported, the trustees said in the motion filed on Sept. 19 that Momentive intends to issue replacement first-lien and 1˝-lien notes in an amount that includes about $50.1 million in accrued and unpaid post-bankruptcy interest.

“In a brazen attempt to grab additional value from the holders of the notes, the debtors are attempting to disregard and re-write their adequate protection obligations to the trustees under the now almost four-months-old final DIP order,” the motion said.

The court confirmed Momentive’s plan of reorganization Sept. 11. The company said on Oct. 2 that it expects the plan to take effect in the fourth quarter.

The stipulation will be presented to the court for approval on Oct. 27.

Momentive, a silicones and advanced materials company based in Albany, N.Y., filed for bankruptcy on April 13, 2014. The Chapter 11 case number is 14-22503.

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