Innovative Communication asks court to approve claims settlement that would dismiss Chapter 11 case

By Caroline Salls

Pittsburgh, July 20 - Innovative Communication Co. requested court approval of a claims settlement under which the involuntary Chapter 11 petitioning creditors will dismiss the case in exchange for payment in full satisfaction of their claims, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

Innovative will pay in full the claims of involuntary Chapter 11 petitioners Greenlight Capital Qualified, LP and Greenlight Capital Offshore Ltd., as well as the claims of the Rural Telephone Finance Cooperative and National Rural Utilities Cooperative Finance Corp.

Also under the settlement, Innovative agreed to declare that payment of the claims does not constitute a fraudulent transfer.

The specific terms of the settlement have been filed under seal.

On May 4, the court was informed that a claims settlement had been reached, and the court in turn postponed hearings on a requested change of venue of the case to the U.S. Virgin Islands and on Innovative's request that the petitioners be required to post a bond to proceed with the bankruptcy case.

An evidentiary hearing on a motion to dismiss the involuntary case was postponed to Aug. 23.

As previously reported, several Innovative Communication creditors asked the court to unseal the terms of the proposed settlement agreement.

The creditors, D.E. Shaw Laminar Lending, Inc.; Fir Tree Recovery Master Fund, LP; Fir Tree Value Master Fund, LP; Redwood Domestic Fund, LP; York Capital Management, LP; and York Distressed Opportunities Fund, LP, also asked the court to postpone the requested July 26 hearing on the proposed settlement to give them time to review the documents once unsealed.

Innovative, a St. Croix, U.S. Virgin Islands, holding company, had the involuntary bankruptcy petition filed against it on Feb. 10. Its Chapter 11 case number is 06-10133.

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