Kaiser indenture trustee requests continuation of stay pending appeal of order overruling plan objections

By Caroline Salls

Pittsburgh, March 7 - Kaiser Aluminum Corp. indenture trustee Law Debenture Trust Co. of New York was granted a continuation of the stay pending its appeal of a court order overruling objections to the plan of reorganization confirmation, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

Under the order granting the extended stay, Law Debenture Trust and Liverpool LP will have the right to object to any distribution of disputed funds to any senior noteholder made during the stay period.

Law originally requested the stay when it appealed the overruling of the objections on Jan. 3.

Law Debenture is not appealing confirmation of the plan.

According to the original motion, the court's decision determines the plan's treatment of creditors under two separate plans of liquidation for two Kaiser Aluminum and Chemical Corp. subsidiaries, which were confirmed on Dec. 20.

As previously reported, Law and Liverpool objected to the plans because of the subordination of 12¾% notes issued in 1993 by Kaiser subsidiary Kaiser Aluminum and Chemical Corp. to the company's 9 7/8% senior notes issued in 1994 and 10 7/8% senior notes issued in 1996.

The objections questioned what debt qualifies as senior to the 1993 notes under the notes' indenture.

In her memorandum of opinion overruling the objection, judge Judith K. Fitzgerald said it was clear that the parties to the 1993 notes indenture all agreed that the 1993 notes could be subordinated to debt that did not yet exist.

Kaiser, a Houston-based aluminum company, filed for bankruptcy on Feb. 12, 2002. Its Chapter 11 case number is 02-10429.

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