Court approves disclosure statement for Trenwick America

By Jeff Pines

Washington, Sept. 14 - The U.S. Bankruptcy Court for the District of Delaware approved a disclosure statement for Trenwick America Corp., according to a Tuesday filing with the court.

The plan was proposed by John Waterfall, Phoenix Partners LP, Phoenix Partners II LP, Phaeton International Ltd., Tejas Securities and the 401(k) plan and trust for John Gorman.

Holders of the Stamford, Conn.-based insurance holding company's 6.7% senior notes are estimated to get a 60.4% recovery.

The plan calls for the noteholders to get $35 million of new notes and certificates and new subordinated notes and litigation trust certificates up to $41.94 million. Once issued, the litigation notes will be considered "stapled" to the notes with which they are issued.

A litigation trust will be established that will investigate, analyze, file, start and prosecute cases that might win the trust money.

Trust preferred claimholders would get a pro rata share of new Trenwick America Corp. interests and residual trust certificates. There are $120.21 million outstanding of 8.82% trust preferred securities, including interest. The Trenwick America Corp. interests and residual trust certificates will also be considered "stapled" together. Their estimated recovery is 0.0%.

The company will also get a $2 million revolving credit facility as an exit facility.

All votes on the reorganization are plan are due by Oct. 18.

The confirmation hearing is scheduled for Oct. 27.

Trenwick filed for bankruptcy on Aug. 20, 2003. Its Chapter 11 case number is 03-12635.

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