Custom Alloy files Chapter 11 liquidation plan, disclosure statement

By Sarah Lizee

Olympia, Wash., Nov. 6 – Custom Alloy Corp. filed a Chapter 11 plan of liquidation and disclosure statement on Friday with the U.S. Bankruptcy Court for the District of New Jersey.

Under the plan, holders of $36.49 million of senior secured claims are expected to receive a 100% recovery through the sale of collateral.

Holders of $1.04 million of purchase money security interest claims are also expected to receive a 100% recovery. Holders will receive cash equal to their claims, the collateral securing their claims, or other treatment agreed to between the holders and plan proponents.

The holder of the $10.18 million secured claim of Electric Boat will retain its lien on SDF equipment and other rights granted to its under certain court orders, authorizing purchase money financing from Electric Boat secured by SDF equipment.

Holders of priority non-tax claims are expected to receive a 100% recovery.

Holders of $4 million of general unsecured claims are expected to receive their pro rata share of distributable cash, or other treatment agreed upon by holders and the liquidation trustee. The estimated recovery is unknown.

The holder of the $34 million purchaser acquired claim will receive all distributable remaining cash after higher-priority claims are paid in full. The estimated recovery for this class is zero.

Intercompany claims and interests are also expected to receive no recovery.

The company sold its assets to CAC Acquisitions, LLC in June.

The consideration included payment of an amount sufficient to satisfy in full in cash all categories in a waterfall estimate with respect to CIBC Bank USA’s obligations and administrative fees and expenses, plus a credit bid of $30 million of junior debt claims, and assumed liabilities.

Custom Alloy is a High Bridge, N.J.-based manufacturer of specialty metals for seamless and welded pipe fittings and forgings. The company filed bankruptcy on Oct. 13, 2022 under Chapter 11 case number 22-18143.

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