Amcast files plan of reorganization that distributes cash on hand

By Caroline Salls

Pittsburgh, Jan. 24 - Amcast Industrial Corp. filed a plan of reorganization and related disclosure statement Tuesday with the U.S. Bankruptcy Court for the Southern District of Indiana.

According to the disclosure statement, the plan incorporates a settlement and compromise of claims between the company, its official committee of unsecured creditors and its lenders.

The settled claims include clams asserted in an adversary proceeding, any claim for recharacterization or subordination of the lenders' claims, any claim for disgorgement of payments previously made to the lenders and any claims relating to the extent, validity and priority of the lenders' liens.

As part of the settlement, of the cash on hand on which the lenders claim a lien, $7 million will go to the term B lenders, $2 million to general unsecured creditors and $2 million to fund prosecution of the estates' claims against General Motors.

The remaining cash on hand will be used to pay administrative expense, priority and priority tax claims, the fees and expenses incurred in winding down the estates after plan confirmation and pursuing the GM causes of action and any other claims of against third parties, as well as payment of any GM allowed class 6 and class 7 claims.

Plan creditor treatment

Treatment of creditors under the plan will include:

• Administrative, priority and priority tax claims will be paid in full using cash on hand;

• Secured claims of revolving lenders and term loan A lenders have already been paid in full;

• Holders of $52.91 million in secured claims of the term loan B lenders will receive $7 million from cash on hand plus the net proceeds from sale/ collection of all remaining assets;

• Holders of general unsecured claims will receive their share of $2 million from cash on hand; provided, however, that if the plan proponents are unsuccessful in objecting to GM's re-pricing claim, the general unsecured claim payment will be reduced to $1.75 million;

• To the extent allowed and not subordinated, holders of GM's re-pricing claim and unsecured claim will receive the same treatment as general unsecured creditors, unless the GM claims are determined to be of a higher or lower priority, in which case they will be repaid first as an offset to pre-bankruptcy accounts receivable owed to the estates from GM, estimated at $4.3 million; second, as an offset against post-bankruptcy accounts receivable owed to the estates from GM, estimated at $2 million; third, as an offset against tooling accounts receivable owed to the estates from GM, estimated at $3 million; as an offset against GM causes of action; and, to the extent GM's claims exceed all of the foregoing, from cash on hand;

• Holders of other secured claims will be paid in full by receiving either the proceeds from the sale of the collateral or the collateral itself;

• Intercompany claims will be extinguished; and

• Equity interests will be cancelled and holders will receive no distribution unless all other claims have been paid in full.

In addition, Amcast's exclusive period to solicit votes on the plan will expire on April 9 or at the conclusion of the confirmation hearing, extended from Jan. 22.

The plan confirmation hearing is scheduled for April 9.

Amcast, a Fremont, Ind., manufacturer and distributor of automotive products, filed for bankruptcy on Dec. 5, 2005. Its Chapter 11 case number is 05-33322.

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