Sturgis Iron & Metal disclosure statement OK'd; plan confirmation hearing set for March 5

By Jennifer Lanning Drey

Portland, Ore., Jan. 20 - Sturgis Iron & Metal Co., Inc. obtained court approval of the disclosure statement for its plan of liquidation, according to a Tuesday filing with the U.S. Bankruptcy Court for the Western District of Michigan.

The plan confirmation hearing is scheduled for March 5.

As previously reported, the company has sold most of its assets and agreed to convert its Chapter 11 bankruptcy case to Chapter 7 bankruptcy, which is used for liquidation.

Creditor treatment under the plan will include:

• Holders of lender secured claims will be paid as the collateral securing their claims is liquidated;

• The holder of the Fifth-Third secured claim will receive the proceeds from the sale of the company's Elkhart property;

• Holders of other secured claims will be paid from either funds on hand or from a tax escrow;

• Holders of priority claims will receive payments from the company's liquidating trust after the holders of administrative expense and secured claims are paid in full;

• Holders of general unsecured claims will be paid from the liquidating trust after holders of administrative expense claims, secured claims and priority claims are paid in full; and

• Holders of equity interests will receive payments from the liquidating trust only after all other claims are paid in full.

Sturgis, a Sturgis, Mich., scrap metal recycling company, filed for bankruptcy on April 4, 2008. Its Chapter 11 case number is 08-02966.

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