Special Devices files plan of reorganization and disclosure statement

By Caroline Salls

Pittsburgh, April 9 - Special Devices, Inc. filed a plan of reorganization and related disclosure statement Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

Under the plan, holders of senior subordinated note claims and general unsecured claims will have the option to receive either new common stock or cash in exchange for their notes.

Under the cash-out option, noteholders and general unsecured creditors would receive the lesser of 5% of the allowed amount of the claims or a total of $1 million to be shared by all creditors electing this option.

The company said it plans to obtain $10 million in new non-convertible secured term notes and $15 million in new series A preferred convertible stock as exit financing.

Treatment of creditors will include:

• Holders of secured claims will recover 100% either in cash or the return of the collateral securing the claim;

• Holders of senior subordinated note claims will recover up to 5% either in new common stock or cash. If these classes vote to reject the plan, they will only be entitled to receive new common stock;

• Holders of unsecured convenience claims will recover 10% in cash;

• Intercompany claims will be reinstated; and

• Holders of old preferred stock, old common stock and section 510(b) claims will receive no distribution.

The plan confirmation hearing is scheduled for June 30.

Special Devices, a Moorpark, Calif., manufacturer of pyrotechnic devices for airbags, filed for bankruptcy on Dec. 15. Its Chapter 11 case number is 08-13312.

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