Motor Coach asks court to deem plan confirmation order final to meet effective date deadline

By Caroline Salls

Pittsburgh, Feb. 25 - Motor Coach Industries International, Inc. has asked the U.S. Bankruptcy Court for the District of Delaware to declare its plan confirmation ruling a final order to allow the company to emerge from bankruptcy by Feb. 28, according to a Tuesday court filing.

According to the motion, the lock-up agreement under which third-lien debtholder and rights offering backstop party Franklin Mutual Advisers, LLC agreed to support Motor Coach's plan of reorganization requires the plan to take effect by Feb. 28.

However, the plan term sheet requires the plan confirmation order to be deemed a final order. The company said the lock-up agreement does not include a final order provision, but the backstop rights purchase and related subscription agreements do.

Since the company's official committee of unsecured creditors appealed the confirmation ruling and is awaiting the outcome of an appeal of its motion to stay the ruling, Motor Coach said the confirmation order is not final under the plan terms.

The company said the committee's appeal will be rendered moot when the plan takes effect, but it most likely will still be pending on the plan effective date deadline.

If the plan does not take effect by Feb. 28, the lock-up agreement will terminate, triggering an event of default on the company's debtor-in-possession financing. If an event of default does occur on the DIP facility, Motor Coach said the DIP lenders can cease funding.

Motor Coach Industries, a Schaumburg, Ill.-based designer, manufacturer and marketer of inter-city coaches and related replacement parts for the North American market, filed for bankruptcy on Sept. 15. Its Chapter 11 case number is 08-12136.

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