Wornick senior secured noteholders decry plan of reorganization treatment of 'favored creditors'

By Caroline Salls

Pittsburgh, June 16 - An informal group of some of The Wornick Co.'s senior secured noteholders objected to proposed confirmation of the company's plan of reorganization Friday, arguing that Wornick's Chapter 11 case was filed to transfer value to some "favored creditors," according to a filing with the U.S. Bankruptcy Court for the Southern District of Ohio.

According to the objection, the favored noteholders secured preferential treatment before Wornick's bankruptcy filing through a restructuring support agreement "at the expense of similarly situated holders of senior secured notes, including the members of the ad hoc committee."

The informal noteholders' committee said Wornick's plan places both groups of senior secured noteholders in the same class, but does not treat both creditor groups the same.

Specifically, the committee said the favored noteholders will purchase the equity in the reorganized company under the plan, while the excluded noteholders will instead receive a cash distribution for a recovery percentage that is lower than the recovery for noteholders entitled to buy equity.

"Now, the favored creditors have but one obstacle to overcome - i.e. confirmation of the plan - to complete the disenfranchisement and the disparate and inferior treatment of the excluded noteholders," the objection said.

Wornick's plan confirmation hearing is scheduled for June 25.

Wornick, a Cincinnati-based food processing and packaging company, made a pre-packaged bankruptcy filing on Feb. 14. Its Chapter 11 case number is 08-10654.

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