Optima Specialty Steel’s plan to have its largest creditor, DDJ Capital Management, plug a $200 million hole in its bankruptcy-exit strategy yesterday cleared an initial legal test, the Wall Street Journal reported today. Following a hearing at the U.S. Bankruptcy Court in Wilmington, Del., Judge Kevin Carey approved an outline of a modified chapter 11 plan, which Optima scrambled to pull together after an earlier $200 million commitment from its owner never materialized. The new plan must still go through a formal voting process, required by bankruptcy law but effectively controlled by DDJ, a Waltham, Mass.-based investment firm. A hearing on final approval of the DDJ-backed plan is set for Oct. 16.
