Cadence Innovation granted approval of series A notes claim settlement

By Caroline Salls

Pittsburgh, March 18 - Cadence Innovation LLC obtained court approval of a series A subordinated note claim settlement with Venture Blocker, Inc., Yucaipa American Special Situations Fund I, LP and Yucaipa Corporate Initiatives Fund I LP, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

When Cadence filed for bankruptcy, Venture Blocker filed a $41.46 million series A notes claim, and Yucaipa filed a $19.67 million series A notes claim.

The company and its official committee of unsecured creditors have investigated the claims, and Cadence said they believe potential objections exist.

However, the noteholders claim there is no basis for claims objections.

Under the settlement, the Venture Blocker claim will be reduced to a $20.93 million general unsecured non-priority claim, and the Yucaipa claim will be reduced to a $9.07 million general unsecured non-priority claim.

Of the $9.07 million Yucaipa claim, $6.68 million will be allocated to Yucaipa Corporate and $2.38 million to Yucaipa American.

The settlement parties have also agreed to negotiate a plan of liquidation that includes the settlement terms. In addition, Venture Blocker and Yucaipa have agreed to vote in favor of the plan.

Cadence, a Troy, Mich.-based auto parts supplier, filed for bankruptcy on Aug. 26, 2008. Its Chapter 11 case number is 08-11973.

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