OM Industries, GECC, PBGC ink administrative expense claim settlement

By Caroline Salls

Pittsburgh, Jan. 29 - OM Industries, Inc. lender General Electric Capital Corp. requested court approval of an administrative expense claim settlement between GECC, OM Chapter 7 trustee Joseph B. Collins and the Pension Benefit Guaranty Corp., according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Massachusetts.

According to the motion, GECC consented to the use of cash collateral to fund administrative expenses if OM's Chapter 11 case was converted within 10 days of an order approving the wind-down of the company's affairs.

However, the case was not converted within the required 10-day period.

As a result, the parties negotiated a settlement that establishes a $4.69 million reserve for payment of administrative expenses that arose before March 23, 2007, including claims filed by the PBGC.

Also under the settlement, GECC has the right to challenge any pre-March 23, 2007 administrative claim for any reason.

GECC said roughly 70 administrative claims have been filed in OM's bankruptcy case.

OM Industries, formerly Malden Mills, is a Lawrence, Mass.-based textile company that filed for bankruptcy on Jan. 10, 2007 in the U.S. Bankruptcy Court for the District of Delaware. The case was transferred to the Massachusetts court on Jan. 16, 2007. Its Chapter 7 case number is 07-40124.

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