Tuesday in White Plains, N.Y., Momentive Performance Materials Inc.’s first-lien lenders will ask a bankruptcy judge if they can vote “yes” to the company’s restructuring plan even though they already voted no.
Changing the vote to yes would pay those bondholders in full, in cash, the nearly $1.5 billion they are owed. Previously, more than 80% of them voted to reject the plan, as part of an argument to collect so-called make-whole payments, or premiums they felt Momentum owed them for refinancing their bonds.
The “no” vote would give the first-lien lenders replacement notes instead of cash, which Judge Robert Drain said should be subject to higher interest rates. Momentive has built those higher interest rates into its newest plan, but if the judge allows the vote change, the interest fight becomes moot.
Either way, Tuesday should move the silicone and quartz maker closer to final approval on its restructuring proposal, which would cut $3 billion from its balance sheet.
The 70-year-old company, owned by Apollo Global Management, filed for Chapter 11 protection in April as it faced a $60 million interest payment to creditors.
On Tuesday in Camden, N.J., the owner of two clubs inside the shuttered Revel Casino Hotel will fight to remain open.