A lawyer who represented Apollo Global Management LLC in the Momentive Performance Materials Inc. bankruptcy said the judge’s ruling in that case will let private-equity firms negotiate more aggressively with creditors, Bloomberg News reported yesterday. Apollo, which owned Momentive, was allowed to impose a reorganization plan on the chemical company’s senior secured creditors that gave them new notes for the full amount of their debt at lower-than-market interest rates. Bankruptcy Judge Robert D. Drain also denied them their make-whole payments, which compensate bondholders for early redemption of their notes. The precedent will allow private-equity owners to push secured creditors to accept less favorable terms than they might otherwise seek, using the threat of the cramdown ruling, said Ira Dizengoff, a partner at Akin Gump Strauss Hauer & Feld LLP.
