MMC Precision committee amends plan to tweak lender distribution

By Caroline Salls

Pittsburgh, June 30 - MMC Precision Corp.'s official committee of unsecured creditors filed an amended plan of liquidation and related disclosure statement for the company's bankruptcy case Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

According to the disclosure statement, the company received court approval to sell substantially all of its assets on June 9, 2009.

From June 29, 2009 forward, the committee said MMC Precision has had no employees and has not operated.

The amended plan calls for the creation of a liquidating trust that will administer and liquidate all of the company's remaining property, including a first-lien lender contribution, which is new to the amended plan, avoidance actions and state law causes of action to recover fraudulent transfers.

Under the amended plan, the initial source of funding is the first-lien lender contribution, which consists of a $1 million carve out from the proceeds of the sale of the first-lien lenders' collateral and any other collateral proceeds the first-lien lenders agree to release from their liens.

Treatment of creditors will include:

• Holders of debtor-in-possession facility claims, 503(b)(9) claims, administrative claims and non-tax priority claims will be paid in full;

• Holders of first-lien loan claims will retain their liens on all collateral following the sale. If the collateral is not enough to satisfy the claim, the deficiency will be treated as a general unsecured claim.

Under the original plan, these creditors were to have been paid from the proceeds of the company's asset sale;

• Holders of general unsecured claims will receive a share of liquidating trust assets when enough assets have been accumulated to make distributions.

Under the amended plan, these creditors will also have the opportunity to assign third-party claims to the liquidating trust. To the extent the claims are not assigned by some claimants, individual claimants will not receive a distribution from proceeds of a leveraged buyout lawsuit; and

• Holders of intercompany claims and old equity interests will receive no distribution.

Morton, Ill.-based MMC manufactures highly engineered metal components and subassemblies. The company filed for bankruptcy on March 22, 2009. Its Chapter 11 case number is 09-10998.

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