Omega Navigation committee looks to solicit plan alternative offers

By Caroline Salls

Pittsburgh, Sept. 11 - Omega Navigation Enterprises Inc.'s official committee of unsecured creditors requested emergency court approval to solicit offers for better alternatives to the company's proposed plan of reorganization, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of Texas.

The committee also asked the court to terminate Omega's exclusive periods for filing and soliciting votes on a plan "in order to effectuate any fruits of the committee's efforts to obtain a higher and better recovery for creditors than that provided in the proposed plan."

The committee said it wants to communicate with and give the company's financial and other business information to third parties with an interest in acquiring the Omega debtors and/or their businesses or assets, whether through one or more Chapter 11 plans or a combination of plans and asset sale transactions.

As previously reported, Omega Navigation filed its plan on Aug. 3.

Disclosure objections

The committee objected to the related disclosure statement on Aug. 31, arguing that the plan violated the Bankruptcy Code and that the disclosure statement "proposes a solicitation and voting process that is confusing, unfair and inadequate."

The creditor group said the company's junior lenders also objected to the disclosure, citing violation of the Bankruptcy Code.

The committee said Omega then unilaterally decided to adjourn the disclosure statement hearing twice.

Plan issues

According to Tuesday's motion, the company filed the proposed plan without any negotiation with the committee.

The committee said it is looking to improve upon the following plan terms:

• Granting a new value funding transaction at a value prescribed by the Omega debtors without subjecting a proposed new equity interest to market forces to determine its fair value;

• Releasing senior lenders from claims asserted in Greek litigation. The committee said the company has valued unencumbered litigation assets at $570 million; and

• Retaining all claims and causes of action against the debtors' estates, including unencumbered Chapter 5 claims, which the company has not described or assigned values.

In addition, the committee said Omega "make no effort whatsoever in or under the proposed plan to ascribe value to their vessels, charter contracts or any of their other assets."

Omega Navigation is an Athens, Greece-based provider of marine transportation services. The company filed for bankruptcy on July 8, 2011 under Chapter 11 case number 11-35926.

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