HSBC withdraws objection to confirmation of Bush Industries plan

By Jeff Pines

Washington, July 28 - HSBC Bank USA withdrew its opposition to the confirmation of Bush Industries, Inc.'s reorganization plan, according to a Wednesday filing with the U.S. Bankruptcy Court for the Western District of New York.

HSBC did not indicate why it withdrew its objection to the Jamestown, N.Y. furniture maker's plan.

In its previously filed objection, HSBC said it believed that JPMorgan Chase Bank and the other pre-petition bank lenders, which are hedge funds, were dragging it along in the restructuring process. The hedge funds control about 64% of the pre-petition bank claims, which are about $162 million. In its earlier objection, HSBC said it held a 12.7% share of Bush's pre-petition bank debt.

The reorganization plan calls for the lenders to make $65 million in loans, which HSBC called forced loans because it is being required to participate.

"Neither bankruptcy law nor prevailing case law authorizes confirmation of a plan that would require a creditor to extend post-confirmation creditor to a reorganized debtor to satisfy pre-petition claims at a deep discount and extinguish co-obligor liens and guaranties," it said.

Bush filed for bankruptcy on March 31. Its Chapter 11 case number is 04-12295.

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