OM Industries to receive extra cash collateral in exchange for $59.21 million GE Capital claim

By Caroline Salls

Pittsburgh, June 14 - OM Industries, Inc. reached an agreement with DIP lender General Electric Capital Corp., under which GE Capital will receive a $59.21 million claim against the company in exchange for extending $500,000 in additional cash collateral, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Massachusetts.

The agreement is subject to bankruptcy court approval.

According to the motion, the extra cash collateral can be used for any purpose in OM's bankruptcy case, including for distribution to unsecured creditors.

All claims against GE Capital will also be released under the agreement.

In addition, with the exception of a $622,000 wind-down amount, the $500,000 settlement payment and a $4.69 million reserve for administrative expenses, all proceeds from OM's asset sale and collateral proceeds will be applied to GE Capital's secured claim.

OM Industries, formerly Malden Mills, is a Lawrence, Mass.-based textile company that filed for bankruptcy on Jan. 10 in the U.S. Bankruptcy Court for the District of Delaware. The case was transferred to the Massachusetts court on Jan. 16. Its Chapter 11 case number is 07-40124.

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