OCA unsecured creditors committee asks court to designate Palmisano's votes "not in good faith"

By Jennifer Lanning Drey

Eugene, Ore., Aug. 31 - OCA Inc.'s official committee of unsecured creditors asked the court to designate class 4 votes cast by creditor Bartholomew Palmisano on the company's plan of reorganization as "not in good faith," according to a Thursday filing with the U.S. Bankruptcy Court for the Eastern District of Louisiana.

Palmisano is the terminated former chairman and chief executive officer of OCA, according to the motion.

Although OCA's plan of reorganization is supported by unsecured creditors in class 4, Palmisano has voted to reject the plan.

The committee said in the motion that Palmisano is different from typical unsecured creditors because his subordination agreement with Bank of America NA requires that any eventual distribution on the claim likely be delivered to senior lenders.

The committee also believes Palmisano is trying to keep OCA in Chapter 11 while pursuing a competing business, according to the motion.

"Rejection of the only economic deal that makes sense cannot be in good faith," the committee said in the motion.

Palmisano previously asked the court to temporarily allow his $3.2 million claim for voting purposes related to the company's amended plan of reorganization.

In addition, Palmisano asked the court in a separate motion to disqualify a vote made by Jefferies & Co., Inc. on the grounds that it was not solicited or procured in good faith.

As previously reported, under the company's revised plan of reorganization, unsecured creditors will receive $3 million in cash, for an estimated recovery of 30%. Their total claims are estimated at $9 to $11 million.

These creditors will also be eligible to receive additional deferred cash payments up to the full amount of their allowed claims.

OCA, a Metairie, La., provider of business services to orthodontic and dental practices, filed for bankruptcy on March 14. The Chapter 11 case number is 06-10179.

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