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Oglebay Norton's unsecured creditors respond to plan objections
By Jeff Pines
Washington, July 23 - Oglebay Norton Co.'s unsecured committee of creditors responded to objections to the company's reorganization plan in a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.
Objections to the plan were recently filed by the senior secured noteholders, Nufleet LLC and CapitalWorks LLC, and a group of shareholders.
The secured noteholders objection is that they will not be fully reimbursed, the committee said. But, Oglebay Norton plans to file an amended disclosure statement and plan that will change the recovery the noteholders will get and unimpair their claims.
The committee decided that "after much hand-wringing" it was better to restore the pre-Chapter 11 status of the secured notes than to risk a potentially protracted legal battle with the noteholders.
As for Nufleet, CapitalWorks and the shareholders' objection that there is no mention of the $451 million offer to buy Oglebay Norton, the committee said it is because the disclosure statement was filed the day before the Cleveland-based minerals company received the letter of intent.
Even so, the committee said it agrees with the company that the offer will not give creditors a better recovery because the offer is only for the company's assets and does not include its liabilities. The company also will add more information on the letter of intent.
As for objections that the disclosure statement lacks information on asbestos- and silica-related claims, Oglebay Norton added more information on its negotiations. In addition, it said the company has more than enough insurance coverage to take care of existing and future claims.
The committee includes holders of more than two thirds of Oglebay Norton's bonds and is backing the company's plan, it said.
A July 27 hearing is scheduled.
Oglebay Norton filed for bankruptcy on Feb. 23. Its Chapter 11 case number is 04- 10558.
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