Momentive Performance Materials Inc. is set to face court rulings on its bankruptcy plan, including on a proposal to withhold some payments for unpaid interest that has senior lenders at odds with lower-ranked creditors, Bloomberg reported today. U.S. Bankruptcy Judge Robert D. Drain said that he would render his decision on whether to confirm the plan and on related lawsuits today. The Waterford, N.Y.-based maker of silicone and quartz products filed for bankruptcy protection in April after struggling to meet payments on debt dating to its $3.8 billion buyout by Leon Black’s Apollo Global Management LLC in 2006. One dispute involves special premium payments to first-lien lenders based on unpaid interest. Under the proposed plan, the lenders will be repaid in full, but without the interest. Momentive said that the premium is not earned if the debt comes due on account of the bankruptcy. A decision to award the so-called make-whole premiums to the creditors would reduce the payments available to lower-ranked creditors. The judge must also decide whether unsecured noteholders are subordinated by contract to second-lien noteholders. The case is In re Momentive Performance Materials Inc., 14-bk-22503, U.S. Bankruptcy Court, Southern District of New York (White Plains).
