Wickes' unsecured creditors committee objects to bondholders' trustee claim

By Jeff Pines

Washington, Oct. 28 - Wickes Inc.'s unsecured creditors committee objected to the Bank of New York's 2005 bond claim in a Wednesday filing with the U.S. Bankruptcy Court for the Northern District of Illinois.

The Bank of New York is the successor trustee for the 11 5/8% notes. It claims Wickes owes the holders $36.6 million in principal, but the committee said the principal should be $31.1 million.

The difference between the two figures, the committee alleges, is not principal, but interest and a penalty. According to the committee, the pre-petition interest should be $413,337.79 not $640,006.90 as in the bond claim.

The increase of the interest rate to 18% as of Dec. 16, 2003 is a penalty and should be either disallowed or subordinated to the original interest rate, it said.

In addition, the bond claim also wants the Vernon Hills, Ill.-based building materials company to pay the ad hoc bond committee's professional fees.

The committee objects to this, too, because it said neither the terms of the notes, the indenture nor the bankruptcy code allow for the payment of professional fees. It noted the court never approved any professionals for the ad hoc committee; therefore, Wickes should not have to pay any professional fees for the ad hoc committee.

A hearing is scheduled for Oct. 28.

Wickes filed for bankruptcy on Jan. 20, 2004. Its Chapter 11 case number is 04-02221.

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