InSight U.S. Trustee objects to pre-packaged plan creditor treatment changes

By Caroline Salls

Pittsburgh, July 2 - InSight Health Services Holding Corp.'s U.S. Trustee objected to confirmation of the company's pre-packaged plan of reorganization, saying the company has changed the plan significantly since the votes were solicited, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

U.S. Trustee Kelly Beaudin Stapleton said changes that have been made since plan votes were solicited include altering the recovery earmarked for senior subordinated noteholders and old common stockholders, authorizing the issuance of additional senior debt and adding more parties to the "overbroad" release provisions without the consent of the parties who would be releasing the claims in question.

Specifically, Stapleton said the amended plan changes the amount of stock the senior subordinated noteholders and old common stockholders would receive under a proposed exchange offer, now giving 10% of new common stock to holders of old common stock and 90% to the noteholders.

The original plan gave 87% of the stock to noteholders and 13% to old common stockholders.

According to the objection, since InSight has made changes to creditor treatment, votes on the pre-packaged plan should be re-solicited.

The plan confirmation hearing is scheduled for July 9.

InSight, a Lake Forest, Calif., provider of diagnostic imaging services, filed for bankruptcy on May 29. Its Chapter 11 case number is 07-10700.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.