Silicon Graphics' unsecured creditors committee reserves right to object to disclosure statement

By Jennifer Lanning Drey

Eugene, Ore., July 25 - Silicon Graphics, Inc.'s official committee of unsecured creditors filed a reservation of rights to object to the company's disclosure statement if certain issues are not resolved prior to its July 27 hearing, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

In particular, the committee said in the filing that the reorganization plan calls for $9 million to be held by a disbursing agent and distributed to unsecured trade creditors. However, the disbursing agent could be the reorganized debtors or their designee.

The committee said it believes the $9 million should be put in an escrow account, and Silicon Graphics should have no rights to the money.

In addition, the committee believes quarterly distributions to holders of class 6 claims should be made in 90-day intervals after the initial distribution date.

The committee also said in the filing that the Silicon Graphics' current plan seeks to take away the committee's role in overseeing the plan because the committee is not given consent rights to documents necessary to the implementation of the plan.

The plan also provides that the committee be dissolved as of its effective date, but the committee believes some form of post-effective date claims monitoring is necessary.

According to the filing, the committee has been in negotiations with Silicon Graphics since it filed its first reorganization plan and related disclosure statement on June 30.

Silicon Graphics, a Mountain View, Calif., technology provider, filed for bankruptcy on May 29 in the U.S. Bankruptcy Court for the Southern District of New York. The company's Chapter 11 case number is 06-10977.

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