GenTek obtains court approval for reorganization plan

By Carlise Newman

Chicago, Oct. 7 - GenTek Inc. has obtained court approval for its reorganization plan from the United States Bankruptcy Court for the District of Delaware. GenTek expects the plan to become effective shortly and remains on target to emerge from Chapter 11 within approximately 30 days.

Under the plan, bank lenders, with $506.1 million in claims, will receive $60 million in cash, less any adequate protection payments received by the lenders after Aug.1 from the proceeds of any tax refund, and any adequate protection payments received after Sept. 30; $216.5 million of new senior term notes; 8,126,177 shares of the new GenTek common stock; and shares and warrants equal to the dissenting bondholder holdback.

The $5.7 million secured claim of GenTek against Noma Co. arising under the Canadian Credit Agreement and the related indemnity claim of The Bank of Nova Scotia against GenTek will be paid in full.

The $69 million tranche B lender secured claims will be acquired by GenTek in exchange for $33.5 million of new senior term notes and 1,256,980 shares of new common stock.

General unsecured creditors, with $35 million in claims, can choose the equity or cash option. Under the equity option, unsecured creditors will receive 174,365 shares of new common stock, tranche A warrants to purchase 331,628 shares of new common stock and tranche B warrants to purchase 85,471 shares of new common stock

Under the cash option, unsecured creditors will receive payments in cash of 6% of the allowed amount of the claim, and will share $5 million in cash.

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