Oglebay senior secured noteholders oppose confirmation of reorganization plan

New York, Sept. 17 - An ad hoc committee of Oglebay Norton Co.'s senior secured noteholders said the company's plan of reorganization should not be confirmed because they will be impaired.

Even though the reorganization plan says this group is unimpaired, the committee said they will in fact lose $11.3 million that they are owed and some subordination rights, according to a filing Friday with the U.S. Bankruptcy Court for the District of Delaware.

Oglebay Norton's second amended plan of reorganization proposes to reinstate the senior secured notes and then immediately cash out the holders after the plan becomes effective.

But the committee says they are owed an additional $11.3 million for the early prepayment premium and payments at the default rate of interest, "which the debtors have admitted."

The holders also point out that the reinstatement does not include all the subordination rights currently supporting the notes.

Senior noteholders were not given the opportunity to vote on the plan, added the committee, which says it represents holders of more than 75% of the notes.

A hearing at which the court will decide whether to confirm Oglebay's reorganization plan is scheduled for Sept. 29.

Oglebay Norton filed for bankruptcy on Feb. 23, 2004. Its Chapter 11 case number is 04-10558.

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