Parmalat USA's disclosure statement approved by court

By Jeff Pines

Washington, Jan. 14 - Judge Robert Drain approved Parmalat USA Corp.'s disclosure statement and set March 1 as the date for the confirmation hearing.

Drain's order was filed with the U.S. Bankruptcy Court for the Southern District of New York Thursday.

The reorganization plan calls for the company to be reorganized around its Farmland Dairies subsidiary and for General Electric to get 80% of the reorganized company's equity.

The remaining 20% will go to a management incentive plan and lenders for the junior secured exit facility will get warrants to buy common equity.

General unsecured claims against Parmalat are expected to recover 29 cents on the dollar in cash. General unsecured claims against Farmland are expected to get a portion of $3 million in cash, a portion of a $7 million 6% note and the proceeds of any Farmland litigation claims for an estimated recovery of 56%.

All of the existing equity securities will be cancelled.

Parmalat filed for bankruptcy on Feb. 24, 2004. Its Chapter 11 case number is 04-11139.

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