Omega Navigation files amended plan to incorporate settlement terms

By Caroline Salls

Pittsburgh, April 24 - Omega Navigation Enterprises, Inc. filed its second amended plan of liquidation on April 24 with the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, the disclosure statement for the first amended plan was approved on March 19. The plan confirmation hearing is scheduled for May 13.

The company said the second amended plan incorporates three settlements, including a settlement related to the junior lenders' renewed motion for a superpriority administrative expense claim and all other junior lender claims; a settlement related to the claims of and proposed releases for the benefit of released directors, officers and other insiders; and the settlement of any objections that estate parties may have against any professionals' fees.

Creditor treatment

Treatment of creditors under the second amended plan will include the following:

• Administrative claims will be paid in full;

• Senior lender claims are preserved for the sole purpose of finalizing the transfer of vessels and all other property to be transferred to them under a settlement.

Upon the completion of the transfers, the claims will be automatically deemed released;

• Junior lenders' adequate protection claims will be paid out of available amounts in priority to all other claims.

Junior lenders will receive no distribution on account of their deficiency claims;

• As full consideration for being included in release provisions, creditors in the released related persons class, which replaced the Kassiotis priority claims class included in the first amended plan, will receive no distributions under the plan;

• Holders of general unsecured claims will receive a share of any available amounts;

• Intercompany claims will be cancelled;

• The indemnification claims class was eliminated plan; and

• Interests will be cancelled and holders will receive no distribution.

Plan comparison

In comparison, treatment of creditors under the first amended plan was slated to include the following:

• Administrative claims were to be paid in full;

• Senior lender claims were to be preserved for the sole purpose of finalizing the transfer of vessels and all other property to be transferred to them under a settlement.

Upon the completion of the transfers, the claims were to be automatically deemed released;

• To the extent the holder of a junior lender claim asserted adequate protection rights and there was no objection, those rights were to be allowed and paid out of available amounts.

If there was an objection to the rights, they were to be paid out of available amounts as the court determines;

• To the extent the Kassiotis priority claim was allowed, it was to be paid in full. To the extent a Kassiotis pre-bankruptcy claim and severance claim were allowed, they were to be treated as general unsecured claims;

• Holders of general unsecured claims were to receive a share of any available amounts;

• Intercompany claims were to be cancelled;

• Indemnification claims were to be cancelled, conditioned on release provisions. However, if the court did not approve the applicable release provisions, all indemnification claims were to be preserved, with no general unsecured claim distributions to be made until the court entered an order resolving all indemnification claims; and

• Interests were to be cancelled, with holders receiving no distribution.

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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